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Istrabenz Sells Food Company to Croatia's Atlantic Grupa

Koper, 01 July (STA) - The insolvent Istrabenz holding has sold its food subsidiary Droga Kolinska to Croatian company Atlantic Grupa in a deal worth EUR 382m less debts aimed at slashing its debts.

The contract on the sale of 95% in the Slovenian food company, whose product line ranges from soft drinks to snacks and spreads, was signed by representatives of Istrabenz and Atlantic Grupa on Wednesday, Istrabenz said in a press release issued through the Ljubljana Stock Exchange on Thursday.

The deal culminated a three-month process that saw the Koper-based Istrabenz commission French bank BNP Paribas to seek out interested domestic and international investors for the majority stake.

Istrabenz received a host of offers for the stake, selecting Atlantic Grupa as the best bidder. The Croatian company offered EUR 382m less Droga Kolinska's debts as of the date of the conclusion of the transaction, which is expected to be competed by the end of the year.

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

"The proceeds from the sale will contribute to clearing the debt of the Istrabenz holding and lay the foundations for financial restructuring," Istrabenz chairman Tomaz Berlocnik said in the press release.

Moreover, Istrabenz says the new owner will provide Droga Kolinska with the foundations for growth and expansion to new markets.

"Atlantic Grupa entered the process as a strategic partner with the aim of providing for development of Droga Kolinska as a whole," chairman of the Croatian company Emil Tedeschi said.

The combined company will have sales of EUR 650m and a workforce of 4,300 staff, making it one of the biggest food companies in SE Europe.

Atlatnic Grupa, whose main business is sports food production, already owns respected brands such as multi-vitamin supplement Cedevita and Dietpharm.

With the acquisition of Droga Kolinska it will add brands such as coffee Barcaffe/Grand Kafa, soft drink Cockta and the snack Smoki.

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 generated EUR 326m in revenues in 2009, reporting an operating profit of EUR 23.3m.

More details about the deal are expected to be revealed at a press conference scheduled for 1 PM in Portoroz, featuring Tedeschi alongside Istrabenz officials and Droga Kolinska CEO Slobodan Vucicevic.

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