An EBRD medium-term loan to Fibrex SA, a Romanian nylon producer, would support the restructuring effort following its privatisation. The Romanian Ministry of Finance sold Fibrex to RadiciNylon SpA in January 2000. RadiciNylon, based in Italy, is the third largest nylon fibre producer in Europe and having already integrated Fibrex into its worldwide operations strategy intends to modernise the plant and increase production capacity.
In addition to its own financing of Fibrex’s operations, RadiciNylon, has asked the Bank to provide a € 10 million loan to support the development process. The priority is to return Fibrex to profitability and improve the quality of its production. RadiciNylon is introducing Fibrex’s products to new export markets in Western Europe.
The transition impact is significant as the loan provides post-privatisation support. The demonstration effect of a major restructuring effort by a foreign investor in a difficult industry, such as the chemical sector, benefits Romania. The availability and improvement of Fibrex’s products will also benefit the local textile and automotive sectors.
The borrower will be Fibrex SA, a Romanian joint stock company, which produces nylon fibre for the textile industry and tyre cord for the automobile industry. RadiciNylon is a privately owned company headquartered in Bergamo, Italy. RadiciNylon is part of Radici Group, which started its activities in 1920 in the trading of textiles, entered industrial production in 1945 and integrated vertically into chemical production in 1970.
€10 million loan repayable in two years.
The project was categorised as C/1, requiring an environmental audit, which was carried out by an independent environmental consultancy firm. A five-year Environmental Action Plan (EAP) has been developed which includes short-term, low cost remediation measures, and measures to be implemented under the future investment projects. Fibrex will be required, through a legal covenant of the loan agreement, to commit to the implementation of the EAP. The implementation schedule for the EAP is phased over five years and the major environmental improvements are anticipated in years 2001 and 2002. It is anticipated that, if this working capital financing proceeds, the Bank will develop a second phase operation at Fibrex, which would enable the plant to implement the EAP fully and meet EU environmental standards.
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