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Kvaerner and EBRD join forces in Romanian privatisation
As part of its continuing support for the privatisation process in Romania, the European Bank for Reconstruction and Development (EBRD) is financing the acquisition by Kvaerner of two metallurgical and heavy engineering plants, IMGB and FECNE, located on the outskirts of Bucharest. Kvaerner controls the two Romanian plants through Kvaerner-Romania, an offshore holding company funded in conjunction with the EBRD. The EBRD’s US$ 36.1 million (ECU 32.9 million) financing package comprises a US$ 18.6 million (ECU 17 million) equity investment in Kvaerner-Romania, and a US$ 17.5 million (ECU 15.9 million) loan to IMGB, syndicated to Den norske Bank.
"This investment represents a significant advance in the Romanian privatisation programme and shows that the EBRD, in association with a sponsor such as Kvaerner, can finance privatisation in difficult sectors", said Linsay Forbes, Director of the EBRD’s Romania team. He continued: "It is fully consistent with the EBRD’s strategy for Romania, which focuses on supporting privatisation and foreign investment to achieve effective governance."
Jon Silvert Nielsen, Vice-President of Kvaerner, said: "This is an important development for Kvaerner. The acquisition of the Romanian plants will lead to a significant expansion of the group’s manufacturing resources."
Taking into account acquisition costs and capital expenditure, the investment programme will total US$ 72 million (ECU 65.8 million) over four years. With 3,250 employees, IMGB and FECNE serve the hydro power, shipbuilding and other industrial sectors.
Kvaerner is an Anglo-Norwegian international engineering and construction group, which is involved in maritime transportation, environmentally friendly processing of natural resources and complex construction activities. With an annual revenue of almost US$ 10 billion and 60,000 employees people in more than 100 countries, it is a leader among many of the global industries in which it operates.
The EBRD has played a major role in supporting privatisation in Romania and in developing the private sector in general. To date, it has made over 25 investments in private firms, totalling over ECU 567 million. The EBRD’s total portfolio in Romania stands at more than ECU 1.26 billion.
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