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EBRD signs loan to Czech electronics firm
A Czech-Japanese-US joint venture will manufacture electronic components of a higher quality at less cost through a USD 7.4 million loan approved today by the European Bank for Reconstruction and Development (EBRD).
Tesla-Y.S.a.s, a Hradec Kralove electronics firm, will use the proceeds of the loan to modernise its plant and to introduce new, state-of-the-art technology for the development of packaging materials. The company will employ 146 employees from the region to assist in the production of components and control devices for the computer, telecommunications and automotive industries.
Ron Freeman, First Vice-President of the EBRD, said: "This project demonstrates the EBRD's growing interest in working with local medium-sized companies. It will help revitalise the electronics industry, which has traditionally been a very important sector of the Czech economy."
The project has been completed within a very short time frame. Following initial contacts in May 1994, the EBRD showed great flexibility in its approval procedures, allowing the project to be finalised in a mere four months. In keeping with the EBRD's increasing local presence, this project has been mainly run from the Bank's Prague Office.
The total cost of the project is USD 15.3 million, of which the EBRD's share, in the form of a 7-year convertible loan, is almost 50 percent; the rest is financed through equity from Tesla, Y.S., CAEF (Czech-American Enterprise Fund) and JAIDO (Japan International Development Organisation Ltd).
The company is expected to begin operations by the end of 1994, with production aimed entirely at the export market.
Y.S. Inc., a Japanese company specialising in this field, holds 24 percent of the firm and will contribute its know-how. CAEF, a privately managed venture capital company founded in 1991 through a grant from the United States government, is the leading venture capital company in the Czech Republic today, having financed 23 ventures to date. JAIDO is an international development organisation established in 1989 to promote industrial and economic growth in emerging markets through equity investments.
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