The proposed project entails the purchase of 100% of shares in an existing Russian company, ZMZ-Bearings Ltd (the “Company”), operating near the city of Nizhny Novgorod. The purchase agreement was signed on 01 august 2007. The share acquisition will be financed by Daido Metal Co., Ltd, the “Sponsor” (for two-thirds) and by EBRD (for one-third). The Company’s operations will be modernised and its sales network will be expanded both locally and abroad.
The proposed project assists the entry of a high quality auto parts supplier into Russia. The project will promote technology and skills transfer from the Sponsor to the Company, as well as improvement in operational efficiency and product quality. The success of the project may encourage other international automotive suppliers to enter Russia and assist in the restructuring of local companies in the automotive supply sector, thereby increasing local competition and aiding in the development of a market economy in Russia.
ZMZ-Bearings manufactures automobile engine components, such as half-shell bearings, bushes and washers. It is the leading Russian company in the manufacture of such products locally. The Company will be owned and managed by the Japanese Sponsor, a leading manufacturer of plain bearing products with operations in twelve countries worldwide.
EBRD will provide up to RUB 130 million (approx. USD 5 million equivalent) in equity financing.
Approx. USD 20 million equivalent to be funded by a combination of debt and equity.
The project was screened B/1. Independent environmental due diligence, including a Phase I site audit, a Phase II soil and groundwater investigation, and a site visit by the Bank’s Environmental Specialist confirmed that whilst there are some marginal outstanding environmental, health and safety issues that need to be addressed, overall the Company’s operations are in compliance with national requirements and there are no significant environmental, health and safety issues. All of the outstanding issues are contained in an environmental action plan (EAP), which will form part of the Subscription Agreement between EBRD and the Sponsor.
Mr. Hideo Yoshida, General Manager
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