The subordinated loan comes from the Société Régionale d’Investissement de Wallonie (SRIW), which finances development projects of companies located in Wallonia in Belgium; the European Investment Bank (EIB), which make finance available to SMMEs in order to contribute towards EU policy goals; and Avril Group financing company Sofiprotéol, which supports the development at all stages of the food and agro-industry chain.
The loan will enable the Walloon-based company to strengthen its production capacity by increasing volumes and installing new equipment to maintain its leading position in its European markets. By processing agricultural raw materials produced close to its industrial plants, COSUCRA is also contributing to the development and structure of local and sustainable agricultural sectors.
It also reaffirms the key role of the family business in the local economic and social ecosystem. The investment is expected to create no less than 20 jobs within the next three years.
Founded in 1852, six generations have sharpened the company’s pioneering vision to innovate with natural ingredients designed to contribute to healthy and sustainable contemporary diets.
COSUCRA’s standout products include Fibruline, a soluble dietary fibre obtained from chicory roots by applying a gentle water extraction process. Available in liquid or powder form, Fibruline provides a good source of fibre, and can be used as a sugar and fat replacement. Benefits of the prebiotic include a boost to digestive and immune health and glycaemia control.
Another is Pisane Pea Protein, a plant-based ingredient that adds nutrition, along with sustainable credentials. The peas are selected locally, grown with no use of fertilisers, any irrigation and limited use of pesticides, are non-GMO and par particular rich in essential nutrients.
Breakdown of the bond
In 2020, against the backdrop of coronavirus, SRIW began efforts to obtain support from the European Investment Bank in order to cope with an upsurge in demand. At the beginning of 2021, SRIW was endorsed as an EIB partner and intermediary and was granted an initial loan envelope of €100m – with the possibility of doubling this amount – to be used as part of its remit to finance business projects in Belgium.
The subordinated loan granted to COSUCRA is the first operation to be carried out using this EIB credit line.
FCA example of a subordinated loan:
When a director of a company invests money in the form of debt, rather than in the form of stock. If there is a liquidation, the director is paid before stockholders – assuming there are assets to distribute after all other liabilities and debt have been paid.
The other component the COSUCRA financing comes from Sofiprotéol, a finance company for the French plant protein and oil sector.
With the bond issue benefiting a leading European pea processor, Sofiprotéol is also reaffirming its support for the structuring of an effective and competitive agri-food sector, to promote a healthy and sustainable diet and the development of plant proteins. Cultivating peas creates value, particularly for French farmers.
“We are particularly pleased with the spirit in which the discussions took place, taking the interests of all parties into account,” said Jacques Crahay, CEO of COSUCRA.
“Indeed, beyond securing financial resources, we wanted to engage with our partners to share experiences and improve the business project from a sustainability perspective. This support strengthens our determination to continue our mission tirelessly, continually adapting to our two main stakeholders: farmers and the food industry.”
SRIW VP Sébastien Durieux added, “SRIW has been supporting COSUCRA’s projects for more than 15 years now. The company is a model of resilience and ambition. With its natural ingredients, COSUCRA is particularly well positioned to meet the needs of consumers and the underlying trends in the agri-food sector – such as clean labels and plant-based products – particularly with the booming demand for alternatives to animal proteins.”
According to EIB VP Kris Peeters, EIB’s goal is to support EU policies and improve the lives of Europeans.
“Companies – and SMEs in particular — are the driving force behind the Walloon economy, in terms of economic dynamism and job creation. COSUCRA is a shining example to its region and beyond, and we are delighted that the first transaction of the EIB-SRIW programme is supporting its investment project.”
Sofiprotéol COO Xavier Dorchies added the investment is fully in line with the company’s commitment “to support the agricultural, food and environmental transitions, and with Avril Group’s purpose: serving the earth.”