The proposed project is an up to USD 200 million long-term loan to the client to support O’Key’s development plan throughout Russia during 2008-2010 as well as restructure its debt portfolio.
Transition impact potential will derive from support of development of a modern food retail industry in the regions where penetration of modern retail formats is still minimal or non-existing. O’Key will enhance greater efficiency and customer orientation of its competitors through competitive pressure. The consumer will benefit from access to an efficient, competitive and hygienic shopping environment. Procurement of products locally will generate strong backward linkages and encourage local producers to process better quality and higher quantity according to best business practice.
O’KEY LLC, a limited liability company, operator of the O’Key hypermarket chain in Russia, and ZAO Dorinda, a closed joint stock company, owner and developer of hypermarkets in Russia.
Up to USD 200 million long-term corporate loan, of which up to US$ 120 million to be financed by EBRD and the rest to be syndicated to commercial banks under EBRD A/B loan structure.
USD 815 million.
The proposed project has been screened C/1. A corporate audit of the Company’s approach to environmental, health, safety, labour management and compliance was conducted by a member of the Bank’s Environment & Sustainability Department.
The due diligence did not identify any major environmental or social issues associated with site selection and acquisition or construction and operation of stores and their food processing facilities. The Company complies with the necessary Russian requirements for environment, health and safety and labour (EHSL) and has comprehensive policies with regard to human resource management and health and safety which include priorities for protecting in-store sanitary standards and the health and safety of staff.
The Company will be required to develop the existing EHSL procedures and implement a comprehensive Environmental Management System and EHSL procedures for construction and operation of its stores and food processing facilities according to the best international practice. This requirement forms part of an Environmental Action Plan (‘EAP’) to be implemented by the Company within an agreed timeframe.
In line with the EBRD’s Environmental Policy, the Company will be required to ensure that stores will meet relevant Russian Federation and applicable EU requirements for environment, health and safety, including waste management, hygiene and health and safety at work place; and applicable Russian Federation laws and standards on employment, as well as standards consistent with the Conventions of the International Labour Organisation relating to the employment of children and young people, discrimination at work, and forced labour.
The Bank will evaluate the project’s compliance with the EAP and applicable environmental, health, safety and labour requirements during the lifetime of the project by reviewing annual environmental and social reports and as well as ad hoc visits to the Company by the Bank’s Environment & Sustainability Department staff.
Dmitry Prianikov, CFO
Tel.: +7 (812) 449 27 66
For business opportunities or procurement, contact the client company.
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Tel: +44 20 7338 7168
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