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Third bank joins EBRD's Polish restructuring programme
The Polish Stabilisation, Restructuring and Privatisation programme (SRP), developed and sponsored by the European Bank for Reconstruction and Development (EBRD), has signed up a third Polish bank, Powszechny Bank Gospodarczy (PBG) in Lodz. PBG has committed US$ 20 million (ECU 17.4 million) and this has been matched by the EBRD. The US$ 40 million (ECU 34.8 million) fund will invest and restructure medium-sized Polish companies.
"The SRP is designed to finance companies in need of financial and operational restructuring. It also gives the Polish banks an effective way to restructure part of their problem loan and equity portfolio," said Alain Pilloux, Director of the EBRD's Poland Team. "With three banks now participating in the programme, we expect to have a good pipeline of projects under active development."
In addition to PBG Lodz, the other two bank funds under way are with PBK Warsaw and Bank Depozytowo Kredytowy w Lublinie SA. This third transaction brings the total SRP commitments to US$ 70 million, with 50 per cent contributed by the EBRD and 50 per cent by the Polish banks. The EBRD has worked closely with the Polish Government, the Polish banks and the European Union's PHARE programme to advance the SRP.
One more bank is expected to participate, with the total programme expected to reach at least US$ 80 million. Additional funds of US$ 12 million are being provided by the PHARE programme.
Aside from the equity investments, which are expected to range from US$ 1 million to US$ 4 million for each selected enterprise, the SRP has also been designed to provide hands-on turnaround expertise and technical support. The programme is driven by the need to find a permanent viable solution for the participating enterprises and each fund will seek to sell the investment once the enterprises have been successfully stabilised.
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