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EBRD and Polish government sign framework agreement for Polish SRP programme
A new source of equity funding for Polish companies is a step nearer to being realised following the signing of the framework agreement for the Stabilisation, Restructuring and Privatisation programme (SRP), developed and sponsored by the European Bank for Reconstruction and Development (EBRD) in cooperation with the Polish Government and the support of the European Union's PHARE programme.
Under this programme, which is dedicated to the financial and operational restructuring of medium sized companies, up to US$ 80 million of financing will be made available for investment, complemented by at least US$ 12 million of technical assistance funding, which will be provided by the PHARE programme.
Guy de Selliers, Deputy Vice President of the EBRD, said: "This programme is specially intended to reach a large number of financially distressed but viable companies which until now have had limited access to fresh capital and management assistance. Without this assistance they are in danger of going bankrupt." He added: "The programme, which is to be managed commercially by professionals based in Poland with industrial, turnaround and venture capital experience, is designed to complement and support other private sector and Polish government initiatives, such as the Mass Privatisation Programme".
Deputy Minister of Privatisation, Ewa Freyberg, commented: "By acting as an effective owner, commercially managed by a private sector company, the SRP is expected not only to fill a gap in enterprise restructuring and privatisation but also to have a major indirect impact on the privatisation process and the restructuring of the banking system".
Of the US$ 80 million programme, the EBRD will invest up to US$ 40 million in identified companies with participating Polish banks as co-investors. The EBRD will provide another US$ 40 million to the banks in order to enable them to participate fully in the programme. Approximately 30 companies are expected to participate in the SRP in its current phase and the programme may be expanded in the future.
Up to six Polish banks will participate alongside the EBRD, playing a central role as co-investors in the investment companies and assisting the SRP management in the selection of the appropriate enterprises. The SRP is expected to give these banks an effective way to restructure a part of their problem loan and equity portfolio and enhance their know-how in this area.
Aside from the equity investments, which are expected to range from US$ 1-4 million for each selected enterprise, the SRP has also been designed to provide hands-on turnaround expertise and technical support. The programme will be driven by the need to find a permanent viable solution for the participating enterprises and would seek immediate divestment once the enterprises have been successfully stabilised.
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