Garden Brewery to be Placed on Stock Exchange in Next 6 Months

Lauren Simmonds

As Poslovni Dnevnik/Ana Blaskovic writes on the 9th of October, 2019, two of the most recent pension fund investment projects, which amount to 320 million kuna together, will finally bring a fresh listing to the Zagreb Stock Exchange – The Garden Brewery.

While investing in tourism is already a well-established strategy in a country that is more or less lives entirely from it, it isn’t that surprising that AZ pension funds, entrusted with around 44 billion kuna in pension savings, in partnership with Valamar, have decided to recapitalise one of the ten leading tourism companies with a cash injection of 300 million kuna.

However, the 20 million kuna injection that AZ is investing in one of the largest Croatian craft breweries, The Garden Brewery, is the first step in the pension industry in a somewhat unexpected direction, and with a solid business story behind it.

“They made us put on suits and look very sharp,” laughs the head of The Garden Brewery’s Supervisory Board, Tomislav Alpez, when talking about the nine months during which the details of the collaboration were brushed aside.

The story goes that the first contacts came at a party when participants, wearing suits, of course, were drinking homemade craft beer and asked: “Is this a Croatian product? Who makes it?”.

Alpeza says that after three years in business, The Garden Brewery has found itself at the crossroads and it a bit of a moral dilemma; to continue as a family business or, while maintaining the basic principles, try to grow even further. The choice came down to the idea of ​​growth, in conjunction with Submarine, which required additional capital and provided an organisational buzz.

The merger of 51 percent of Submarine (with both brands continuing to exist and retaining their own respective specifics) was achieved through a partnership with AZ pension funds, which became the owner of 49.5 percent of The Garden Brewery.

“We’ll use these funds to invest in production and capacity expansion so that we can take advantage of the new growth and expansion opportunities that we’ve identified in existing and emerging markets,” says Alpeza.

He adds that they are currently exporting to eleven countries, getting ready for franchising, thinking about entering distant markets like those of South Korea and Australia, all of which, they rightfully boasted, with zero kuna in net debt.

“We want to integrate everything creative on the craft scene, and our seriousness and willingness to act responsibly and transparently has been confirmed by our intention to list our shares on the Zagreb Stock Exchange in the next six months,” said Alpeza.

The CEO of AZ pension funds, Kristijan Buk, says that thanks to the crucial condition of a healthy business opportunity for their members, they were attracted to the idea entirely by the fact that this is an entirely Croatian story, in which the production from domestic ingredients and the orientation towards exporting play a major role.

“We’re not only interested in large companies, we’re also open to smaller investments and projects if they can meet the criteria we set them, which, in addition to being successful in business, implies a willingness for maximum transparency and accountability,” he said.

However, the bulk of the financial injection of 300 million kuna is intended to recapitalise Imperial Riviera in a tried and tested partnership with Valamar, which will, in turn, see another 126 million kuna invested. AZ pension funds will thus acquire 48 percent of ownership in the Rab company, and Valamar’s stake will consequently fall to just over 40 percent.

Valamar’s CEO, Željko Kukurin, recalled that the company started the investment cycle in Rab four years ago with AZ, and the plan is to invest up to 1.5 billion kuna in the next three to five years.

Part of the investment will be related to the continuation of the reconstruction and doing up of the facilities, and part to the expansion to other Croatian destinations as well as to destinations in the region.

“The ambition of this business plan that we’re working on with AZ is to make Imperial Riviera one of the five leading tourism companies in Croatia in three to five years,” said Kukurin.

Make sure to follow our dedicated business and Made in Croatia pages for much more information on The Garden Brewery and much more.


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