The loan contract was signed in Ljubljana on Monday after an agreement was penned last week under which the Polish equity fund Abris Capital Partners will inject EUR 15m into the Slovenian company.

"The EBRD funding will support Paloma's expansion goals by financing energy and resource efficiency improvements as well as working capital needs to increase the company's ability to pursue its recapitalisation process and attract additional investments," a release from the bank reads.

Abris is offering EUR 3.30 per share in the recapitalisation, which is to be endorsed by Paloma shareholders in January.

The Slovenia Sovereign Holding, which holds 71% in Paloma, pledged to back the capital injection unless Abris's offer is trumped by an investor on time for the 5 January shareholders' meeting.

Under the plan SSH will sell its remaining stake to the investor paying in EUR 15m in fresh share issue, in this way completing the privatisation of Paloma.

"The EBRD is proud to make a contribution to Paloma's transformation. Increased productivity and efficiency will allow the company to attract capital which will take Paloma to the next level of development in a highly competitive market," Jolanta Gabriel, head of the Ljubljana EBRD office, said.

Paloma CEO Tadej Gosak meanwhile reiterated that Paloma last year posted its best result in the past five years by generating EUR 3.5m in operating profit on EUR 87m in sales.

Nevertheless, he said the company needed capital for restructuring and further development; the EBRD loan would help it to implement needed investments and ensure its long-term stability.

The EBRD has backed more than 700 investment projects with a total of some EUR 900m in Slovenia since 1991.