Romanian Prodlacta’s insolvency troubles find cure with takeover by Moldavian milk tycoon

Jardan Lapte Company (JLC), the main player on the dairy market in Moldova owned by businessman Vladimir Jardan, is to take over the majority interest in Romanian dairy producer Prodlacta Brasov, currently in insolvency. The move is part of a reorganization plan that was officially confirmed by the Brasov Tribunal. The JLC Group reached a EUR 283 million turnover last year and its business interests cover Moldova, Ukraine, Kazakhstan, Germany and Romania. With 2,500 employees on its payroll, JLC provides over 80 varieties of dairy products. The Moldavian tycoon is aiming to turn Prodlacta around and transform it into a genuine cash cow with plans for a EUR 20 million turnover in place by 2015. The business strategy underpinning this ambitious goal is to extend Prodlacta’s distribution areas. Another reorganization measure is boosting Prodlacta’s finance with a sizable capital increase following which JLC will become holder of 67.7 percent of the Romanian company’s share capital based on the conversion of EUR 7.8 million (RON 35.4 million) worth of debts. Prodlacta Brasov entered insolvency following the loss of one of its major sources of revenue, namely a milk delivery contract with the Romanian state in March this year. Following a decision of the Brasov County Council, milk deliveries from Prodlacta under the “Croissant and Milk” state - funded program for school children were discontinued due to insufficient funds allotted by the Government. Suspicions of a politically-motivated sabotage of the Prodlacta business by the liberal leader of the County Council spiced up the affair and took the involved parties to court in a heated litigation. The “Croissant and Milk” program dates back to school year 2002-2003 and it aims to provide basic bakery and dairy products to students enrolled in the pre-school and the first two school years in Romania, both within the private and the state school system. Ioana Jelea ioana.jelea@romania-insider.com