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Press Release

Political Risk Insurance for Breakfast Cereal Cooperative in Ukraine

Political Risk Insurance for Breakfast Cereal Cooperative in Ukraine
 

Support for SME through Small Investment Program demonstrates Ukraine's improving investment environment

WASHINGTON DC, Dec 21, 2016—The Multilateral Investment Guarantee Agency (MIGA) announced today guarantees through its Small Investment Program totaling US$6.35m in support of Sweden's Lantmännen ek för's equity and shareholder loan investments in its Ukrainian subsidiary, Lantmännen AXA PJSC.

The guarantees support the injection of equity and loans to Lantmännen Ukraine for better hard currency debt management, and the operation of a factory and related facilities in Boryspil (near Kiev) that produce breakfast cereal foods.

MIGA is providing coverage for up to ten years against the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance. The guarantees are a key component of Lantmännen ek för's new political and economic risk management strategy in Ukraine.

"We're sending a clear signal through our support for the processed foods sector that private investors have a significant role to play in Ukraine," said MIGA Executive Vice President and CEO Keiko Honda.

Lantmännen ek för is an agricultural cooperative owned by 27,000 Swedish farmers. The cooperative operates in over 20 countries, and generated an annual turnover of $4.4b in 2015. Lantmännen's brands include AXA, Kungsornen, GoGreen, Schulstad, Gooh, Finn Crisp and Bonjour.

Its subsidiary, Lantmännen Ukraine, sells 146 branded products in breakfast cereals, roasted and granola muesli, and instant porridge across Europe and Central Asia. While Lantmännen Ukraine accounts for half of the local breakfast cereals market, the company's top export markets are Russia, Moldova, Georgia and Azerbaijan.  Almost all of Lantmännen Ukraine's suppliers are from within the country.

"Lantmännen's strong commitment to doing business in Ukraine is further strengthened by the support of the MIGA guarantee and its incorporation into our risk strategy," said Krister Zackari, CEO Lantmännen Cerealia.

MIGA's Small Investment Program is designed to facilitate investment into small and medium enterprises (SMEs) involved in the finance, agribusiness, manufacturing, and services sectors. Investments are eligible for coverage under the Small Investment Program if they are related to the establishment of an SME, or made into an existing SME, in a developing member country.

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MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders. For more information, visit www.miga.org

Contacts:

In Washington: Vamsee Krishna Kanchi, (202) 458-9771, vkanchi@worldbank.org

For Broadcast Requests: Huma Imtiaz, (202) 473-2409, himtiaz@worldbankgroup.org

For more information, please visit: http://www.miga.org

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News Release

2016/12/21/MIGA