AD Plastik - Rouble Loan

Location:

Regional

Project number:

43055

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

17 Apr 2012

Status:

Complete

PSD disclosed:

17 Apr 2012

Project Description

The EBRD is considering providing a senior loan of €9.8 million in rouble equivalent to ZAO PHR and ZAO ADP Kaluga, both limited liability companies incorporated in the Russian Federation. The borrowers are subsidiaries of AD Plastik, a well established automotive components producer with headquarters in Solin, Croatia, listed on the official market of the Zagreb Stock Exchange.

The operation will enable ZAO ADP Kaluga to finance the purchase of equipment to be installed at its newly established facility near Moscow. The loan will also refinance shareholder loans advanced by AD Plastik to ZAO PHR, while the proceeds will be further used to complete the investment in its recently incorporated Serbian subsidiary, ADP Mladenovac.

Transition Impact

The transition impact of the project is expected to arise from:

(i) Corporate governance improvements based on an action plan agreed with the company that will further improve the conduct of AD Plastik’s business beyond the prevailing standards of listed companies in the country;

(ii) Skills transfer to the Group’s subsidiaries; and

(iii) Market expansion through the increase of local content and backward linkages in the supply chain.

The Client

AD Plastik is a leading Croatian manufacturer of plastic components for the automotive industry. The Company operates as a sub-contractor and supplier to a number of global automakers (including French, as well as Russian and Japanese brands). Its main production activities are spread over 7 production sites in 4 countries (3 in Croatia, 2 in Russia, one in Slovenia and Romania).

ZAO PHR is AD Plastik’s subsidiary in Samara, while ZAO ADP Kaluga is located in the regional automotive cluster near Moscow.

EBRD Finance

Senior debt of €9.8 million in rouble equivalent.

Project Cost

€10.4 million.

Environmental Impact

Category B.

The potential impacts associated with the current and proposed manufacturing operations of the Company are site specific and can be managed through the implementation of an Environmental and Social Action Plan. Environmental and social due diligence was carried out on the Project via review of questionnaires regarding the corporate and site specific risk management systems employed by the Company; the specifications and performance of the technologies to be utilised at the new manufacturing facilities; and the current environmental performance of the operational facilities. This process was follow-up with additional management Q&A to clarify certain issues.

Due diligence has identified that the Company has robust management systems for environmental and health and safety issues at the corporate level, and these standards are applied diligently at the site level. These standards are driven not just by the Company but also by the requirements of their customers in the automotive sector as is now commonplace in this sector throughout the world. It was confirmed that the management systems will apply to the new facilities.

With regards operational performance, the manufacturing technologies utilised by the Company meet local and EU Standards for environmental performance.

Due diligence did identify that certain issues with regards contractor management systems and stakeholder engagement were not meeting the standards required by the Bank’s Performance Requirements but the Company has agreed an action plan to bring these aspects in line with Bank Policy.

Technical Cooperation

None.

Company Contact

Katia Zelic - katija.zelic@adplastik.hr
Danijel Lukovic - danijel.lukovic@adplastik.hr

 

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