Healthy People - Equity

Location:

Russia

Project number:

41665

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

10 Nov 2010

Status:

Signed

PSD disclosed:

07 Sep 2010

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing a financial package of €20 million in combination equity and debt to finance the expansion of the Zdorovye Ludi (“Healthy People”) pharmaceutical retail chain mostly in the Russian Regions, and to refinance Company’s short-term debt, thus improving its capital structure.

The Project will lead to an increased competition in the Russian pharmaceutical market, contributing to an improved price-to-quality balance in the sector in Russian Regions.

Transition Impact

The Project transition impact will derive from the following key areas:

(i) Enhancing local competition and reducing the market share of State controlled pharmacies.

(ii) Transfer of skills through collaboration with local universities that includes organisation of internships for students in Healthy People drugstores and subsequent employment of students. In addition, some employees of the Company are also professors in local universities.

Locally hired staff will also benefit from the training programmes carried out in the headquarters of the Company.

(iii) Improvement of corporate governance.

The Client

Zdorovye Ludi (“Healthy People”), a pharmaceutical retail chain in Russia.

EBRD Finance

€20 million in combination of equity and debt.

Project Cost

Total project costs amount to €20 million.

Environmental Impact

Environmental classification and rationale

The project is categorised B. The expansion of a pharmaceutical retail network is associated with a number of site specific issues, which can be readily identified, assessed and mitigated through measures as defined in the Environmental and Social Action Plan.

Key environmental issues and mitigation

Environmental issues associated with the Company operation’s are not significant with regards to environmental, health and safety and social impact.
Due diligence has been carried out on the Company operations by means of discussions with management around policies, procedures and performance against environmental and health and safety regulations; and the corporate activities undertaken with regard to stakeholder engagement. Selected operational outlets were also visited to inspect operational conditions. Certain areas were identified that require to be addressed to bring the operations into compliance with the Bank’s Environmental and Social Performance Requirements (PRs) and these issues have been addressed via the drafting of an Environmental and Social Action Plan (ESAP) which is currently being agreed with the Company.

Summary of Environmental Action Plan

The Company will be required to adhere to the Bank’s PRs. Specific actions include the drafting and implementation of an Environmental Management System in line with the requirements of ISO 14001; the drafting of a Stakeholder Engagement Plan in line with the Bank’s PR10; upgrades to the current Health and Safety Management System where required to bring it into compliance with the requirements of OHSAS 18000; and the implementation of a Contractor Management Plan to ensure that the actions of contractor’s meet the requirements of the various management plans outlined above and the Bank’s PRs.

Monitoring and reporting

The Company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project.

Technical Cooperation

None.

Company Contact

Alexey Batulin
General Director
OOO “Healthy People”
Primorsky pr., b.54, k.1, lit.A
St.Petersburg, 197374
Russia

Phone +7 812 321 0011
Website: www.zl.ru

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