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FMO has arranged a $21.5 million long-term loan to Spayka LLC, Armenia’s largest exporter of fruit and vegetables, to expand the company’s horticulture greenhouse production and support its ambition of becoming ‘IPO-ready’ for an equity market listing if an attractive opportunity arises in the next few years.
FMO and Proparco, the private sector financing arm of France’s Agence Française de Développement (AFD) group, provided $10.75 million each to Spayka to fund the construction and operation of 20 hectares of greenhouses using the market-leading ‘semi-closed’ technology supplied by French horticulture equipment specialist Richel for growing high quality tomatoes and bell peppers. The new greenhouse will allow Spayka to produce up to 8,000 tonnes of tomatoes and 1,000 tonnes of bell peppers every year.
Reinier Douqué, Manager Agri, Food & Water at FMO, said: “Spayka has been on a strong growth trajectory in building both its freight forwarding distribution division and agribusiness mainly serving the CIS export markets. FMO and Proparco are helping to ensure the company maintains its competitive edge by investing in cutting edge sustainable technologies and improving its corporate governance processes, which may ultimately pave the way to an equity capital raise through a stock market listing.”
FMO, Proparco and the Spayka management team have worked closely together to develop an Environmental and Social Action Plan, which aims to improve the company’s long term sustainability performance, reduce its operational risks and facilitate relationships with smallholder farmers.
Both lenders will also support Spayka in strengthening its internal processes through a corporate governance review and resulting improvement plan. Spayka will establish a formal board of directors and an audit committee, overhaul its control processes and adopt a business continuity road map.