Finnfund Commits EURO 3 Million in South Balkan Fund

03 Mar Finnfund Commits EURO 3 Million in South Balkan Fund

Small Enterprise Assistance Funds (SEAF) announced today Finnfund’s approval of a EURO 3 million equity investment in the SEAF South Balkan Fund (SBF). Since end of 2005, SBF has provided equity and long-term debt to SMEs in Serbia, Montenegro, and Macedonia in order to facilitate their growth and expansion. Finnfund will be the sixth shareholder in the fund, which currently has investments from the Dutch and Swiss development finance institutions FMO and SECO, as well as USAID, SEAF, and Vladimir Pesesvski (the fund’s General Director). Finnfund’s investment increases the total fund size to EURO 13.15 million.

Since its approval in October 2005, SBF has analyzed more than 300 companies for investment across Serbia, Montenegro, and Macedonia. To date, SBF has invested in 4 companies with investment sizes between EURO 325,000 and EURO 1.47 million and has 11 companies in its pipeline under consideration.

1. A2B Express Delivery in Belgrade is a parcel and document delivery company. The company has 30 employees and a fleet of 21 vehicles. In November 2008 SEAF SBF provided the company with an equity and debt investment to continue expansion of its distribution network, introduce new services, and more effectively manage operational costs.
2. Logo, in Belgrade, Serbia, is the leading reseller, supplier and provider of information technology equipment in the local and regional markets. The company focuses on system integration, installation and servicing of IT and telephone networks, wholesale and retail sale of IT equipment (such as computer parts, cables, adapters and plugs), and manufacturing of optic and patch cables. In October 2008 SEAF SBF provided the company with an equity investment to facilitate its acquisition of two local companies.
3. Gomex is a grocery store and supermarket chain based out of Zrenjanin, Serbia. As of September 30, 2008, the company had 29 grocery stores and 1 supermarket with a 25% market share. Since SEAF’s investment, Gomex has opened 14 new retail stores and hired 90 new employees. In October 2007 SEAF SBF provided the company with an equity and debt investment to facilitate this expansion and to install a new IT system aimed at effective operations monitoring and productivity improvement.
4. PC Centar, based out of Belgrade, is one of Serbia’s leading IT distributors with 16 retail stores and 1 online store. SEAF’s advisory assistance has helped to professionalize the company by installing systems in the areas of organization, planning, management development and control. SEAF SBF’s equity investment assisted the company in its continued expansion and possible acquisition of two of Logo’s retail stores in Novi Sad and Subotica. These four investments constitute EURO 3.695 million of the total EURO 13 million SBF has pledged to the three countries.

SEAF is a global firm specialized in the management of private equity funds in emerging markets. SEAF’s two decades of experience investing in nearly 280 small businesses have permitted it, together with its partners in these funds, to effectively and efficiently deploy growth capital to fast-growing markets underserved by traditional funding sources. SEAF’s extensive experience has allowed it to identify and invest in promising companies that deliver both positive financial results, as well as significant economic and social benefits to their employees and their communities.

Finnfund (www.finnfund.fi) is a Finnish development finance company that provides long-term risk capital for profitable private projects in developing countries. Apart from co-investing with Finnish companies Finnfund provides financing within the SME sector for projects that demonstrate major positive development and environmental effects.