EuroBusiness Media (EBM): Belvédère, the wine and spirits company, is in the midst of a roadshow for a private placement, seeking to place about 70% of its share capital with institutional investors. Jacques Rouvroy, welcome. You are the CEO of Belvédère. Before we talk about the private placement in just one minute, first of all, the company, Belvédère, has undergone some massive changes in terms of size and scope in recent months. Where does the company stand today?
Jacques Rouvroy (JR): From an Eastern European market oriented business, we have turned it over to the West with the acquisition of the French group Marie Brizard, which is very active in France - a leader in France and in Spain - and since then the parameter have almost tripled the size of the group.
EBM: Now, getting back to the private placement which concerns exactly 68% of your share capital, you are seeking to do a private placement with institutional investors following a disagreement with your current shareholder, CL Financial. What's at stake exactly?
JR: The agreement we signed with CL Financial originally, prior to them making a tender offer on Belvédère as a result of the acquisition of Marie Brizard, was that we would tie up our shares for three years, because we have a long-term view for the development of Belvédère, and knowing that they would commit to establishing the float of Belvédère should they get more shares than expected at the tender offer. That was the case - because they got 68% instead of around 50% which was expected - and instead of re-establishing the float they didn't do anything and after one year almost now, we are very dissatisfied with the whole situation. We want to re-establish the float for the group.
EBM: As part of re-establishing the free float, you are currently in the midst of a road-show that will take you until to the end of the month of July, by which time you will have completed the private placement concerning 345 million euros. Now, to be perfectly clear, what is the message that you are selling to the market today, what is the industrial project which you are telling institutional investors about as part of the roadshow and the private placement?
JR: Well, we have two organic growth projects; one is in the USA and one is in France. In France, we want to reactivate the brand Berger, which is very weak in France now, but has a very good image, because it's a very old historical brand. We are in a market in France where there are 140 million bottles produced in the anis industry. The main operator being Pernod-Ricard, followed by Boisset group in Burgundy. We feel that given the size of Marie Brizard and William Pitters - which is part of Belvédère in France - we should aim at reaching a 10% target within the next five years, and that means 40 million bottles, which is a lot more than the 600 thousand bottles which we currently sell. So we have an ambitious view for the activation of Berger.
In the US we have a new project which follows the acquisition of Florida Distillers, which took place in the early part of this year, aiming at penetrating the market, establishing on the US market an upscale American vodka in a very nice looking bottle, which will be called Florida Orange, using our historical know-how for developing nice looking bottles, like we did originally for the Belvédère bottle and for the Chopin bottle. This project is coming through now and will be on the market for the fall of this year.
EBM: Another part of your business plan has to do with debt reduction. You've taken on a certain amount of debt, which you hope to now reduce through divestments and through a renegotiation of existing debt. What can you tell us about your divestment and debt reduction plans?
JR: We have a net debt which is about 400 million euros right now - which is too high. It was normal because we had to raise debt for the acquisition of the Marie Brizard group, but we also addressed the investors at that time that we would not sit on such a substantial debt for ever. It's good to have development projects but it's also good to have disinvestment projects. So what we're doing - and we're starting now - we are disinvesting the activities which are not core business. The first one is the sale of the Pulco and Sirop Sport activity, which we've just sold to Orangina group for 178 million euros. So that will help us with the reduction of the debt. Two other disinvestments that are going to take place for the fall of this year, is the sale of the vinegar and cooking wine of the Florida Distillers business, which will be more or less over 50 million dollars. And last but not least, the sale of the ground which we have in the very heart of Krakow in Poland, which is 7 hectare land for which we have an estimated price of something over 70 million euro. So all that put together, that should net cash of around 200 million for us by the end of the year, which will bring the gearing down to 1, which is a reasonable gearing for our business.
EBM: And finally, as you are now in the midst of a roadshow in which you are asking institutional investors to take a new interest in the Belvédère story, what are you, as a founder of the company, personally doing with your stake - are you increasing it or decreasing it?
No, absolutely not! We want to take advantage of this private placement to participate in the placement and personally we are raising a substantial debt, Christophe [Trylinsk], my Polish partner, and myself, to participate in this placement; the goal being, from the 23% that we control right now, to bring up our holding to close to 1/3 of the equity, 2/3rds being with the float.
EBM: Jacques Rouvroy, CEO of Belvédère, thank you very much.
JR: My pleasure.
