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FMO, Proparco back Armenian grocery business to prepare for possible IPO

The financing will go towards boosting technology, adding greenhouses and tightening governance at Spayka, which is looking to sell 20,000 tons of produce a year.

The Netherlands’ FMO and Proparco, the private-sector arm of France’s development agency, have arranged a $21.5 million long-term loan to Armenian fruit and veg exporter Spayka.

The funds, which will come from the pair on a 50/50 basis, are earmarked for expanding the company’s horticulture greenhouse production and paving the way for a possible listing on the stock exchange “in the next few years.”

A total of 20 hectares of greenhouses will be added, boosting the company’s production capacity to 8,000 tons of tomatoes and 1,000 tons of bell peppers a year. Reinier Douqué, manager for agriculture, food and water at FMO, said Spayka’s freight-forward distribution division, which mostly targets Central and Eastern European states, had so far been the engine of the company’s growth.

“FMO and Proparco,” he added, “are helping to ensure the company retains its competitive edge” by investing in technology and improving its governance, seen as a requirement as Spayka considers preparing for an IPO. This will involve establishing a formal board of directors and an audit committee, revamp its control processes and adopt what the two investors called “a business continuity roadmap.”

The news comes shortly after Agri Investor reported that Suzanne Gaboury, global director of agribusiness, food, forestry and water at FMO, was leaving the organization to join newly minted DFI FinDev Canada as chief investment officer. She was replaced by Hans Bogaard, previously responsible for Africa and farm finance within FMO’s agribusiness department.

Last month, FMO Investment Management, an affiliate of the bank, reached a $250 million first close on the Emerging Markets Loans Fund, which it manages alongside Dutch asset manager NN Investment Partners. The vehicle has a fundraising target of $500 million and a hard-cap of $750 million.