ALPHA RAIL

Location:

Russia

Project number:

41918

Business sector:

Transport

Notice type:

Private

Environmental category:

B

Approval date:

26 Nov 2013

Status:

Complete

PSD disclosed:

25 Oct 2013

Translated version of this PSD: Russian

Project Description

The purpose of the project is to support the development of the client by investing in a bespoke equity hybrid instrument and contributing to the success of a possible future IPO by the client, as well as through the enhancement of corporate standards.

The Project will finance the expansion of the client’s rail activities including the acquisition of new generation railcars and value accretive acquisitions in the rail sector as well as potential participation by the client in the privatisation of railcar R&M companies.

Transition Impact

The transition impact of the project will be derived from two main sources:

  1. Creating new financing sources by providing support ahead of a possible future IPO of a private player promoting international corporate governance standards. The Bank will make available a new bespoke instrument to the client complementing its current financial structure which will allow it to continue expanding prior to any IPO. The Project will also support the Company in further improving certain corporate governance aspects in preparation for a possible IPO, including through the introduction of a dividend policy and the streamlining of its corporate structure.
  2. Widening private ownership by supporting the client’s potential participation in the privatisation of railcar R&M companies. Following Brunswick’s commitment to quality business standards, regulations and legal environment, the client’s potential participation in privatisations could set new standards for additional segments of the Russian railway industry.

The Client

Brunswick Rail Limited, a leading, dedicated freight railcar operating lessor in Russia, which has a fleet of more than 24,000 freight railcars and serves a number of key clients from core Russian industries, including transportation companies.

EBRD Finance

Up to US$ 150 million investment in the client’s preferred shares.

Project Cost

US$ 400 million.

Environmental Impact

Categorised B. The Company developed and is implementing environmental safety and corporate social responsibility policies, disclosed to the public on their website. The Company has also successfully implemented an Environmental and Social Action Plan (ESAP) agreed within previous transactions.

While the acquisition and leasing of railcars is not directly associated with any environmental impacts, potential acquisition of depots and other operational facilities, may involve contamination liabilities. Therefore the Bank will covenant the development and implementation of procedures for identification and valuation of all environmental responsibilities/liabilities of future assets to enable a) initial assessment and b) annual verification of the size of both under IFRS accounting rules.

The Company will also be required to maintain adequate provisions and contingent liabilities in the annual accounts for reasonably anticipated clean-up and rehabilitation costs.

Technical Cooperation

None.

Company Contact

Mr. Nicolas Pascault
Partner /CFO

Paveletskaya sq.2/2, 12th floor
115054 Moscow
Russia

Email: npascault@brunswickrail.com

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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