Project description
and objectives:
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The proposed project is a USD 130 million senior secured loan to OOO News
Outdoor Rus (the company), the largest “out-of-home” advertising media
operator in the Commonwealth of Independent States. The loan will be used to
facilitate creation of a pan-regional outdoor advertising network spanning
several former Soviet republics by the company through acquisition of several
local outdoor operators, integrating them into one unified pan-regional
outdoor advertising network and making follow-on investments to fund capital
expenditure across the region.
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Transition impact:
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The proposed project will build on the original Bank financings of the company
and will facilitate the restructuring of the nascent CIS outdoor advertising
industry, which is excessively fragmented and dominated by inefficient small
stand-alone local companies. As advertising promotes competition, access to
information, and is a key element of any modern market economy, the project
will support further development of an essential and efficient outdoor
advertising infrastructure across the CIS necessary for development of a wide
range of industries in each country and inter- and intra-country commerce.
This financing will also strengthen the position of outdoor in the region as a
viable and cost-effective advertising media.
The project will have a high demonstration effect. As the EBRD provides debt
financing to facilitate the entry of the region’s leading outdoor operator
into smaller CIS markets, it will send a signal of the Bank’s confidence in
the viability of these advertising markets and help open the whole CIS outdoor
advertising industry to external financing. The proposed financing will
reinforce the connection between good practices of the company and access to
external financing. The company’s expansion is spearheading high standards of
transparency in the sector across the whole region and, as such it will have
an overall positive impact on the whole CIS outdoor advertising industry.
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The client:
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OOO News Outdoor Rus, a limited liability company organised in the Russian
Federation, is the largest “out-of-home” advertising media operator in Russia
offering billboards, street furniture, transit and point-of-sale advertising.
The company is majority-owned by a joint venture company created by tThe News
Corporation Limited and a private equity fund managed by Capital International
Inc.
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EBRD finance:
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The proposed financing consists of an A Loan for the Bank’s own account in the
amount of up to USD 40 million with the participating banks providing the
balance.
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Total project cost:
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Total project costs are estimated as USD 173 million. The balance will be
financed by the internally generated cash and existing cash balances of the
Company.
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Environmental impact:
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This Project was screened C/1.
There are unlikely to be any significant environmental issues associated with
this project. Main issues associated with outdoor advertisement business are
visual effects and compliance with statutory and other outdoor advertising
requirements. Environmental due diligence conducted for the previous News
Outdoor projects in 2003 and 2004 confirmed that, apart from standard land use
planning requirements, permits and the planning and installation of
advertising units, there are no environmental issues associated with this
business.
The company also confirmed that News Outdoors’ operations are in full
compliance with the Advertising Committee and relevant municipal bodies'
specifications and standards associated with the Russian outdoor advertising
industry. The company is required to continue to comply with Russian and EU
environmental, health and safety standards and requirements and local and
national public consultation requirements as well as to submit the Bank an
annual environmental report.
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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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Mr. Russell Hoare, Chief Financial Officer
News Outdoor Rus
PO
Box 86, 80 Leningradsky prospect
Moscow 125190
Russia
Website: http://www.newsoutdoor.ru/
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EBRD contact:
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Laure Blanchard, Operation Leader: blanchal@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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