Upon signing the contract, Tadej Gosak, President of the Management Board of Paloma said: "We are pleased to reach this important milestone in the recapitalization process. ECO-INVEST has convinced us that it is capable and committed to investing into the development of Paloma due to its long history in the production of hygienic paper products and its deep understanding of the pulp and paper industry in the region. Following the successful completion of the process, the financial and strategic support of ECO-INVEST will allow us to finalize the restructuring of the company and to complete our strategic investment programme. Paloma needs further investments in the modernization of processes and equipment to improve working conditions as well as in production capacity and energy efficiency. Due to these investments we will move closer to our goal of being the leading manufacturer and provider of hygienic paper products in the Adriatic region and beyond."
The first half of the year Paloma achieved better results than the year before. The company has managed to improve sales by 4% to almost 44 million euros. Paloma has also increased the market share of its own brand on strategic markets and is anticipating positive results for the full year 2016. According to this year’s investment plan, Paloma has just successfully completed major repairs on a paper machine which will produce 2,000 tons of paper yearly more than before and with an investment worth 1.2 million euros.
Boštjan Gorjup, Chairman of the Supervisory Board of Paloma added: "Paloma has taken many steps to restructure and improve its business these past two years. Nonetheless, the company still needs a stable, long-term owner capable of providing urgent investment capital, which the current owner cannot provide. As a result, the recapitalization process of Paloma offers the best opportunity to increase value for shareholders and to improve Paloma’s financial performance, which in turn will help to ensure a stable future for the company."
ECO-INVEST is a Slovakia-based industrial and financial holding with long-term strategic investments in industrial and production companies, primarily in the pulp and paper, tissue paper, envelopes and packaging sectors. The total sales of ECO-INVEST portfolio companies represent more than 800 million euros and total assets are more than 1.15 billion euros. ECO-INVEST’s flagship investment is a 49% stake in the leading regional pulp producer Mondi SCP, a joint venture with the global major Mondi. Mondi SCP is the largest integrated mill producing pulp and paper in Slovakia with a workforce of over 1,120 employees.
In the recapitalization process of Paloma was advised by the financial advisers Erste Group Bank AG and P&S Capital, Ltd. and by the legal adviser Odvetniki Šelih & partnerji, o.p., d.o.o.