The EBRD is considering providing a new up to EUR 25 million debt finance to Universal Alloy Corporation Europe (“UACE”), a producer of aluminium components for the aerospace industry located in Dumbravita, in the north western part of Romania. The EBRD’s contribution will be to support the expanding of the Romanian operations by increasing the extrusion capacity with new presses and to continue investing in vertical integration by acquiring more complex machining and surface treatment robots. This is a follow-up project, after the initial financing of EUR 25 million approved by the EBRD Board on 24 July 2012.
The main transition impacts of this operation are the demonstration effects of new products by introducing materials management programme with a view to full recycling, best in class extrusion technology and expanding the higher-value added operations. This project will make a significant contribution to additional technological skills transfer via both expansions of the existing training programmes as well as increasing the complexity of such trainings.
UACE is part of the Aerospace division of Swiss group Montana Tech Components AG (MTC) which also owns Universal Alloy Corporation in the United States (UAC US). UACE is a limited liability company, incorporated in January 2008.
UAC worldwide (UACE and UAC US) is positioned as the leading global manufacturer and supplier of engineered aluminium hard alloy extrusions, detailed parts, and aerostructure assemblies. MTC also has business lines in industrial components, special machinery for product identification in the metallurgical area and button cells and rechargeable and primary batteries for Original Equipment Manufacturers and retail customers.
The investment is an up to EUR 25 million debt finance to UACE. Additional finance for the project will come from the internally generated cash.
EUR 35 million.
Screening Category: Category IESE. Due diligence is on-going as of June 1 2016.
To date, the Bank has been supplied with information by the Company regarding the technical details of the expansion and the regulatory permitting process that is being carried out by the Romanian authorities. The Bank has commenced due diligence with a review of historical information and Annual Environmental and Social Reports submitted to the Bank by the Company regarding current site operations. Review of the information supplied by the Company will enable a decision to be reached by the Bank on Project categorisation, and subsequently enable drafting of the detailed scope of environmental and social due diligence that will be required to meet the Bank’s policy requirements.
The Bank has a history of engagement with this site dating back several years and throughout the time of this involvement, the client has successfully implemented Environmental and Social Action Plans (ESAPs) related to previous investments to bring operations into compliance with the Bank’s Environmental and Social Policy. The Company has developed effective environmental and OHS management systems and these have been accredited by external verification providers. Operational performance of the existing plant has been typically in compliance with Romanian, and therefore EU, legislative requirements in regard to environmental, OHS and labour issues. Following completion of due diligence, if issues have been identified that require action to bring the Project into compliance with the Bank’s Performance Requirements, then an ESAP shall be drafted and agreed with the client.
Daniel Varzaru, Chief Financial Officer
Universal Alloy Corporation Europe
244A Dumbravita, Maramures, Romania
Tel: +40-262-202 356
Fax: +40-362-418 911
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