Project description
and objectives:
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The EBRD is considering establishing the Kazakhstan Capital Restructuring Fund (KCRF) together with Kazyna Capital Management and other potential investors. KCRF will invest in Kazakh Corporates that took on excessive levels of debt but which are otherwise operationally and managerially sound.
The Fund, with total commitments between USD 100 million (EUR 73 million) and USD 180 million (EUR 131.5 million), will take over existing debt and restructure it on sustainable terms, if necessary after the existing lenders have written off part of their existing loans, possibly in return for an equity stake.
The Fund will typically invest USD 9 million (EUR 6.6 million) to USD 18 million (EUR 13.1 million), with a maximum of USD 27 million (EUR 19.7 million) per investment across a range of sectors, with 15% maximum single company exposure and 25% sector exposure.
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Transition impact:
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The key transition impact will be
1) institution building - the creation in Kazakhstan of a team that has financial restructuring skills that do not exist in Kazakhstan at the moment and which will provide a sustainable alternative to private equity and mezzanine providers in the region;
2) financial intermediation - enabling the further development of a number of companies that are currently constrained by inappropriate balance sheets;
3) knowledge transfer- transfer to Kazakh banks of know how in financial restructuring as the banks should acquire this know how both during the restructuring negotiations and the secondment at any one time of two staff from selected banks;
4) improved corporate governance at the investee company level as strong corporate governance will be a pre-condition for the Fund Manager to guide financially distressed companies back to health; and
5) demonstration effect of a successful financial restructuring which may attract further providers of such specialised financial services into this market.
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The client:
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ADM Capital will be the Sponsor and Fund Manager. It has extensive experience of working successfully with companies in need of restructuring and initially built on its expertise following the Asian debt crisis at the end of the last century. It will commit 10% of the ADM Central and Eastern Europe, Central Asia and Turkey Recovery Fund (CEECAT) (between € 10 and € 30 million) in which the Bank has also invested (BDS 09-XX).
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EBRD finance:
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Commitment of USD 49.5 million (EUR 36.2 million) to USD 72 million (EUR 52.6 million to) a Fund of up to USD 180 million (EUR 131.5 million). EBRD’s share will be between 49.5% of a USD 100 million (EUR 73.0 million) Fund and 27.5% of a USD 180 million (EUR 131.5 million) Fund.
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Total project cost:
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Up to USD 180.0 million (EUR 131.5 million).
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Environmental impact:
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Categorised FI. The Fund Manager is already implementing environmental and social procedures including FMO's Environmental and Social Exclusion List and regular environmental and social reporting to its investors which are in line with PR9 and indicates its adequate environmental and social risk management capacities. For the proposed operation, the Fund procedures need to include the Bank's E & S Referral List as well as conduct its business in accordance with PR9 as well as its HR policy in line with PR2.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Anthony Stalker,
ADM Capital Europe LLP,
22 Upper Brook Street,
London W1K 7PZ
Tel: +44 20 7529 5008
E-mail: nas@admcap.com
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EBRD contact:
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Peter Stredder, Operation Leader: streddep@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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Public Information
Policy (PIP):
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The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations.
Text of the PIP
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Independent Recourse
Mechanism (IRM):
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The EBRD has established the IRM to give local groups that may be directly and adversely affected by a Bank project a means of raising complaints or grievances with the Bank, independently from banking operations.
Guidelines for Making a complaint and the Rules of procedures
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