Financing of Baltex’s capital expenditure programme and a knitting textile project (Lotus).
The operation will enable Baltex 2000 to complete the modernisation of a woven cotton fabric mill in Tallinn and to build a knitting mill with a dying/finishing line at its subsidiary, Lotus Colours 2000 in Sindi, Estonia.
The project will support the restructuring of the Estonian textile industry by restarting operations in the previously bankrupt Sindi plant. Also, it will assist the local banks in improving due diligence skills.
Baltex 2000, together with its fully owned subsidiary Lotus Colours 2000, is the second largest cotton mill in Estonia. It was privatised in 1995 by Asean Interest Limited ( member of Tolaram Group).
EBRD financing consists of:
- DM 5.0 million (ECU 2.6 million) equity investment in Baltex 2000;
- DM 12.0 million (ECU 6.4 million) senior loan to Lotus Colours 2000;
The project will be co-financed with Hansapank, a local commercial bank, which will provide a DM 4.5 million (ECU 2.3 million) long-term loan to Lotus Colours in addition to its existing exposure to Baltex.
DM 56.5 million (ECU 28.4 million)
The project was screened B/1, requiring an environmental audit of the existing facilities and an analysis of the proposed modernisation. Independent environmental due-diligence, undertaken in 1995 and 1998 in accordance with EBRD requirements, did not identify any significant environmental issues associated with the company's operations.
The project is structured to comply with all relevant Estonian and EU legal requirements. There is no record of any fines, penalties or enforcement action against the company.
An Environmental Action Plan (EAP) has been developed by the company on the basis of the findings and recommendations of the environmental audit. The EAP sets out details of future actions to improve environmental health and safety management systems. Planned investments include the construction of a pre-treatment and waste water plant in order to remove elevated levels of ammonium nitrate presently found in the raw water intake. Significant energy efficiency and energy savings will be achieved by the modernisation of the company’s facilities.
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