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Istrabenz Kick-Starts Sale of Food Maker

Koper, 26 March (STA) - The insolvent Istrabenz holding has begun proceedings to sell its food division Droga Kolinska in a bid to slash its debts. As part of the process, Istrabenz has commissioned French bank BNP Paribas to seek out interested domestic and international investors.

BNP Paribas will send an informational memorandum on Droga Kolinska to all interested investors who will sign a non-disclosure agreement, Istrabenz said in a statement posted on the website of the Ljubljana Stock Exchange on Friday.

The memorandum will serve as a basis for investors to file non-binding bids for Droga Kolinska by the end of April. Istrabenz is expected to decide on whether to press ahead with the sale after reviewing the bids.

The potential sale of Droga Kolinska is part of the debt restructuring programme adopted by the company which is fighting to clear nearly EUR 500m in debts after announcing insolvency at the end of April 2009.

In separate proceedings, Istrabenz has already launched the sale of two hotel operators, Grand hotel Adriatic and Istrabenz hoteli, as well as tourism company Turizem Kras, which manages the Postojna Cave, a natural marvel visited by tens of thousands of tourists each year.

Istrabenz had considered selling Droga Kolinska, which it acquired in 2005 by buying Ljubljana-based food company Kolinska, which in turn bought rival food company Droga soon after, in 2008 but changed its mind.

Droga Kolinska, whose product line extends from soft drinks to snacks and spreads, generated EUR 388m in revenues in 2008, reporting a profit of EUR 6.2m.

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