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EBRD in €41 million loan for Turkish bottling plant in NW Russia

By Richard Wallis

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The European Bank for Reconstruction and Development has raised €41 million in long-term funding for an established EBRD client to expand production at a Turkish-owned glass packaging plant in North-West Russia, including a €20 million loan syndicated to Société Générale and ING, with each taking up half the amount.

Despite the fact that large parts of the international syndication market remain frozen since last autumn, the two commercial banks are participating in the loan syndication under an EBRD A/B loan structure, providing a five-year funding for the Kirishi plant near St. Petersburg, owned by OJSC “Ruscam-Kirishi”, the largest producer of glass packaging in Russia.

The EBRD remains the lender of record for the full €41 million and has taken €21 million onto its own books. Of this amount, €8.4 million is being provided to the client as a five-year A loan on under the same terms as the B loan, and €12.6 million is being provided as a C loan of up to seven years most of which is to be disbursed in US dollars.

Russia recently became the world’s third largest beer market after the United States and China, and the client, ultimately controlled by Turkey’s largest glass producer, Sise ve Cam Fabrikalari AS (Sisecam), plans to build an additional glass furnace as part of a €73 million modernisation of its recently acquired Kirishi plant. As with Sisecam Group’s four other existing Russian plants, all the raw materials for glass production at the Kirishi plant will be sourced within the country.

Gilles Mettetal, EBRD’s Director for Agribusiness said: “We are delighted to participate in a fourth investment with our long-standing partner Sisecam in supporting their expansion in Russia in an important sector”.

“As an important financial partner of Şişecam, the EBRD has once again demonstrated its support and commitment to the Group by playing an important role in financing its expansion,” said A. Dogan Arıkan, President of Sisecam Group. “This loan is of particular importance to Sisecam in the current economic environment. It demonstrates a sign of confidence in our Group, which is a result of a long-standing partnership and cooperation between the two institutions in the wider region in which they operate”

In the agribusiness sector, the EBRD has directly committed more than €5 billion in over 340 projects across central and Eastern Europe and the Commonwealth of Independent States.

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