Project description
and objectives:
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This is an equity investment by the Bank in the aggregate amount of USD 120 million (3.77 per cent of the total share capital) in the Company through a purchase of ordinary shares from the Company's majority shareholder. The shares were sold to a target group of private investors, including the Bank, in a secondary share offering. It followed the Company's primary offering of new shares, comprising 25 per cent of the Company's share capital, completed on 23 July 2008.
The proceeds of the Bank’s investment will be used for the priority investments in the transportation network managed by the Company, thus supporting actively the key strategic development objectives of the first Russian large scale intermodal and logistic operator.
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Transition impact:
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The transition impact of the proposed Project is derived from its support for the development and expansion of the first integrated transportation operator on the Russian market. FESCO’s operations not only increase competition in the individual sector segments but also result in creation of a new integrated service offer allowing for greater efficiency and innovation in the transport sector.
The Bank’s presence in the shareholding structure of FESCO will result in improvements to the Company’s corporate governance as well as expansion of its environmental procedures (including health and safety procedures) raising standards in both areas to levels which would be adequate for the planned listing of the Company’s shares outside Russia. The improvements in both areas have been agreed with the Company’s majority shareholder and reflected in the signed Shareholders’ Agreement.
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The client:
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Far Eastern Shipping Company.
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EBRD finance:
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USD 120 million equity investment.
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Total project cost:
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N/A
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Environmental impact:
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The Project has been screened as C/1. The Bank's due diligence assessed the Company’s corporate policies, procedures, practices and management systems as well as the potential risks and liabilities associated with the Company's assets and operations. The due diligence showed that these risks are limited and well managed by the Company. Following its long history and proven track record in the strictly regulated shipping operations and the Company has developed high awareness of environmental, heath and safety issues associated with their operations and is committed to continuous improvement in managing these aspects. The Company has obtained integrated quality, environmental and occupational health and safety management system certifications for its shipping operations. Similar, comprehensive management systems are being developed for the rail and port stevedoring operations.
The current priority CAPEX investment programme focuses on new acquisitions, procurement of equipment (rolling stock and ships) and investments in computerised management support systems, as well as development of the existing dry-land logistic terminals. These investments are likely to have no or limited adverse future environmental impacts, which can be readily identified, assessed and mitigated.
A corporate environmental and social action plan (ESAP) has been agreed to further develop FESCO's operations and management systems to meet EU standards and good international practice, ensuring that the project has been structured in compliance with the Bank's Environmental Policy requirements.
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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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Website: www.fesco.ru
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EBRD contact:
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Elena Gordeeva, Operation Leader: gordeeve@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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