OREANDA-NEWS. December 22, 2009. The European Bank is providing a US7.9 million debt facility to LLC Ergopack, one of Ukraine’s largest producers and distributors of household disposable consumer products. Ergopack is majority owned by Emerging Europe Growth Fund (EEGF), one of three funds managed by Horizon Capital, reported the press-centre of EBRD.

Investment proceeds will be used to expand the company’s product assortment, which currently includes plastic trash bags, sponges, and other household disposable goods, enlarge export operations in Russia, and increase recycling capacities. This is the first local large scale household goods producer in Ukraine supported by the EBRD and it will promote competition in the domestic market by supporting strong local market players.

Commenting on the agreement, Oksana Strashna, Partner at Horizon Capital, said: “We are delighted to partner with EBRD again. Given the complex environment, we see this transaction as evidence of the strength of Ergopack’s financial results and market leadership. Supporting our portfolio companies in raising additional capital is just one of the many ways Horizon Capital adds value as a shareholder.”

Andriy Osypov, CEO of Ergopack, said: “Over the last year we have taken strategic measures to ensure our continued market leadership and reliability. These steps have paid off and we are now in a position to expand in the market. To increase the profitability, we continue to look at cutting the costs, so we are particularly pleased some of the funds will be used to improve our recycling facilities.”

By providing this mezzanine debt, the Bank is promoting an innovative financial product for Ukraine. It allows a bullet point repayment at maturity without amortisation. This may be particularly important for dynamic growth of local companies because it reduces their debt service requirements.

The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of 1 November 2009, it had committed EUR4.2 billion through 194 projects.

Horizon Capital (www.horizoncapital.com.ua) is a private equity fund manager that originates and manages investments in mid-cap companies with outstanding growth and profit potential in Ukraine, Moldova and the region. Currently, Horizon Capital manages three funds, Emerging Europe Growth Fund II (EEGF II), Emerging Europe Growth Fund (EEGF) and Western NIS Enterprise Fund (WNISEF), with over US600 million under management.

Ergopack (www.ergopack.com.ua) is the leading household disposable goods producer in Ukraine. It produces the goods under the trademarks “Kopeyka”, “Melochi Zhizni” and “Domi”.