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EBRD leads banks in $62 million loan to Cherkizovsky group
Borrower is Russia’s biggest producer of processed meats
The European Bank for Reconstruction and Development and a group of commercial
banks are lending $62 million to OOO AIC Cherkizovsky, providing long-term
finance for Russia’s leading producer of processed meats that will allow it to
restructure its balance sheet and retire short-term debts.
The EBRD welcomes the group’s commitment to increase transparency through a
restructuring that will promote corporate governance and that should thus make
the company more attractive to investors, said Hans Christian Jacobsen,
Director of the EBRD’s Agribusiness team.
Given the limited access to medium and long-term funding in Russia,
Cherkizovsky had until now had to use relatively short-term loans to finance
capital investment, which were then rolled over or refinanced over the years,
Mr. Jacobsen added, pointing out that the EBRD’s loan will provide
Cherkizovsky with funding that matches its asset base.
Of the amount being lent, $25.5 million has been syndicated to four commercial
banks. The EBRD portion is $36.5 million, with a six-year maturity.
Raiffeisen Bank Moscow will act as a parallel lender, providing $10 million of
a first tranche repayable in two years. Another $5 million of the first
tranche has been syndicated ING Bank under an EBRD A/B loan structure whereby
the Bank remains the lender of record for the whole amount.
A second tranche will raise a further $10.5 million under the same A/B loan
structure, but with a maturity of four years. Of this, $7.5 million is being
provided by Raiffeisen Zentralbank Oesterreich AG and $3 million by
Raiffeisenlandesbank Niederoesterreich-Wien.
Cherkizovsky is a vertically integrated holding, which employs more than 7,000
people and produces a full range of processed meats, including more than 300
types of sausages and hams under eight different brands, as well as canned and
frozen meat. Its share of the Russian market is around 10 per cent. Processed
meat accounts for up to a quarter of all the meat consumed in Russia.
The EBRD is the largest single financial investor in Russia, with €5.5 billion
committed in 189 projects. Across its 27 countries of operations, the Bank has
to date invested €3.25 billion in 221 agribusiness projects.
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