Project description
and objectives:
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The proposed project will finance the development, construction and operation
of a nation-wide chain of up to 6 international standard specialist retail
centres in Ukraine.
The retail centres with a total leasable area of approximately 115,000 m2 will
be anchored by the leading Ukrainian household goods retailer, Nova Linia. The
sites for the project have been secured in Lvov, Simferopol, Dnipropetrovs,
Donetsk, Borispol (Kiev region) and Bucha (Kiev region).
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Transition impact:
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The project transition impact will derive from the following key areas:
(i) The project will support development of the first professional household
goods chain in Ukraine introducing new property formats and promoting
competition in the retail sector in secondary Ukrainian cities.
(ii) The project will contribute to improvement of the market transparency and
to attraction of foreign capital by sending a positive signal to other
international investors considering similar projects in Ukraine.
(iii) The Bank’s involvement will also assist in mobilising long-term debt
funding for the project.
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The client:
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Cantik Enterprises Ltd, a limited liability company registered in British
Virgin Islands and established to invest in Ukrainian limited liability
companies, each of which will hold an individual retail centre.
The company is sponsored by Dragon Capital, one of the leading finance houses
in Ukraine. Dragon Capital develops the project in partnership with East
Capital, a major Scandinavian investment fund manager.
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EBRD finance:
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Equity investment of USD 12.8 million representing 37.3% of the company’s
shares. The other shareholders would be Dragon Capital and East Capital to
hold 12.7% and 50.0% of shares respectively.
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Total project cost:
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The bank total exposure (USD 12.8 million) will be in the region of 16.2% of
total project costs (USD 79.2 million).
Dragon capital together with East Capital will provide the remaining equity
(USD 20.5 million). The senior debt will be raised in the sum of USD 45.9
million.
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Environmental impact:
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The EBRD’s Environment Department have evaluated this project and noted that
the potential negative environmental impacts are readily identifiable and
easily mitigated. Therefore a B/1 environmental rating has been assigned,
requiring an environmental audit and analysis of the environmental impacts of
the project.
The audit and analysis took the form of a corporate environmental review
whereby Cantik’s ability to construct 6 retail centres to Russian and EU
standards were evaluated. Nova Linia’s ability to operate the stores to
Russian and EU standards was also evaluated.
The conclusions of the review and site visits by a member of the Bank’s
Environment Department were that while there are a number of areas that
require improvement no significant environmental and social risks were
identified and the project presents a low environmental risk. Those areas
needing improvement included hydrocarbon management, record keeping and health
and safety for construction workers.
Going forward the Bank will require Cantik to supply a number of documents for
each site: copies of the Environmental Impact Assessment, results of soil and
groundwater tests, and copies of all appropriate permits including those for
utilities. Together with Nova Linia Cantik will be required to submit an
annual environmental report detailing environmental issues and compliance
status with regard to Russian and EU environmental standards.
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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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Chris S Kamtsios
Dragon Capital
36-d Saksahanskogo
01
033 Kyiv
Ukraine
Tel: (+380-44) 490-7120
Fax:
(+380-44) 490-7121
Website: www.dragon-capital.com
Kestutis Sasnauskas
East Capital
Box 1364
SE-111 93
Stockholm
Sweden
Tel: +46 8 505 88 500
Website: www.eastcapital.com
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EBRD contact:
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Milen Georgiev, Operation Leader: georgiem@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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