An agreement between Greece-based processed foods and snacks producer Chipita with lenders Alpha and Eurobank has reportedly been achieved, thereby allowing the former to purchase a majority stake in the luncheon meats producer Nikas.
By D. Alexaki
An agreement between Greece-based processed foods and snacks producer Chipita with lenders Alpha and Eurobank has reportedly been achieved, thereby allowing the former to purchase a majority stake in the luncheon meats producer Nikas.
According to sources who spoke to "N", a formal announcement of Chipita's takeover of Nikas is expected in the first week of 2017, which would mark the first significant corporate development of the year in the country.
Alpha Bank and Eurobank are Nikas' main creditors and any sell-off of the company would have to have their approval, according to reports.
Merging with Chipita would allow Nikas more flexibility and wider prospects in the SE European market, as the latter has struggled in recent years.
The luncheon meats market in Greece alone is valued at 300 million euros annually, a sector that has been stable even through the ongoing economic crisis.
According to reports, a 30-million-euro share capital increase for Nikas -- 20 million of own capital and 10 million euros via borrowing -- will be the first step in the strategic agreement, followed by a restructuring of its loan obligations, something that includes the possibility of a "haircut".
Finally, the prospect of another strategic investor entering Nikas' share capital or management appears remote, after the departure of Impala Invest from the endeavor.