Fruit juice firm saved from axe
Hortex, the juice processing company, is to issue zl. 200 million ($44.4 million) in bonds to finance restructuring in a move that could save the company from financial collapse.
Hanna Dymek, of Burson-Marsteller, a PR agency representing the company, said Hortex was going ahead with restructuring plans first proposed in the early summer. The plans followed years of disastrous losses for the partly state-owned company and also a series of bailouts by financial institutions.
Hortex is 29.4% owned by Polish bank Bank Gospodarki zywnosciowej (BGz), 22.92% by the European Bank for Reconstruction and Development (EBRD), 22.92% by the Bank of America, 16.35% by Bank Handlowy and 8.33% by other entities, including the treasury.
In July, the company announced restructuring plans and a zl. 160 million ($35.6 million) bond issuance. At the same time, the Bank of America and Bank Handlowy said they would purchase BGz's 30% stake.
The company has been repeatedly bailed out during the past three years with more than zl. 800 million ($178 billion) in loans from the EBRD and Bank of America, said Bogna Sikorska, a food analyst with CDM Pekao Securities.
She said Hortex would ultimately survive its current financial straits. "I believe Hortex is not bankrupt. They have very strong shareholders and supporting banks which won't allow them to go under," she said. "The juice market is very specific and I think that Hortex's stake in the market will increase because Hortex is a very strong brand."
Hortex unofficially teamed up with Agros at the start of the year to wage a joint marketing campaign against competitor Maspex, which has recently taken 19.3% of the market with its two juice brands Kubus and Tymbark. Hortex, once the market leader, has around 18% of the current market, while Agros' juices are sold under the Fortuna name. Agros officials admitted to Sikorska that Hortex had "very serious" cash flow problems. The company had share capital worth almost zl. 215 million ($48 million) in May last year.
Of Hortex's five food processing plants, three located in Lezajsk, Siemiatycze and Sroda Wielkopolska have already been sold.
