WASHINGTON, D.C., April 29, 2005—In
one of its first investments in the chemicals sector in Russia, the International
Finance Corporation (IFC), the private sector lending arm of the World
Bank Group, will provide a $15 million corporate loan to Kuibyshevazot
Joint Stock Company.
Kuibyshevazot started its operations in 1965 as a state owned enterprise
and was privatized in the early 1990s through an employee stock ownership
plan. With the help of an experienced and well regarded management
team, the company has grown steadily into the largest producer of caprolactam
in Russia and the CIS, and one of the top 10 producers of nitrogen fertilizers
in Russia. IFC’s investment will be used to refinance a short term
domestic bond issue and help fund the company’s ongoing capital expenditure
program. The latter aims to modernize and expand the company’s facilities,
build new plants which are integrated with existing ones, and replace and
increase the company’s rail car fleet.
Mr. Rashad Kaldany, IFC’s Director of Oil, Gas, Mining and Chemicals,
said, “We believe Kuibyshevazot’s capital program will help the company
strengthen its current position in the caprolactam and fertilizer markets,
forward integrate its business into downstream nylon products, and increase
its competitive advantage in transportation infrastructure. IFC’s
investment will support that effort by providing the necessary long term
financing which is not always available for mid size Russian companies
Mr. Edward Nassim, IFC’s Director for Central and Eastern Europe, adds,
“Kuibyshevazot was first introduced to IFC in 2002 when it enrolled in,
and subsequently became one of the leaders, in IFC’s advisory Russia Corporate
Governance Project. This relationship has subsequently led to further joint
work in the environmental, health and safety field, and now we are delighted
to extend that partnership into the investment area”.
Mr. Victor Gerasimenko, the Director General of Kuibyshevazot, said, “In
order to maintain our position as a leading chemical company, we need to
not only continuously improve our physical facilities but also ensure we
develop the highest standard of corporate social responsibility. We
are pleased with the productive and meaningful partnership between IFC
and Kuibyshevazot in both these areas, and we look forward to continued
support from IFC in future”.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.
Russia joined IFC in 1993. Since then, IFC has committed $1.8 billion,
including $200 million in syndicated loans, to finance 92 projects across
a variety of sectors. IFC’s portfolio in Russia stands at $1.3 billion.
Currently, Russia is the second largest country exposure after Brazil in
IFC’s global portfolio. IFC’s investments spread across the country’s
most important sectors including banking, leasing, housing finance, infrastructure,
mining, agribusiness, pulp and paper, construction materials, oil and gas,
telecommunications, information technologies, retail, and health care.