Moscow, Russia, June 30, 2010—IFC,
a member of the World Bank Group, today announced that it will partner
with EOS Group of Hamburg, Germany to address the growing problem of nonperforming
loans in Central and Eastern Europe and help restore lending to businesses
EOS and IFC have earmarked close to $100 million to co-finance the acquisition
and resolution of distressed debt. Over a period of three years, IFC and
EOS expect to resolve nonperforming debt with a face value of up to $2
billion. Activities initially will focus on Russia where nonperforming
loans are valued at about $50 billion. IFC and EOS have agreed to jointly
invest in consumer debts in Russia and assets will be managed by the local
EOS subsidiary. The co-investment program is expected to expand to other
markets in the region.
“We are pleased to partner with IFC,” said Justus Hecking-Veltman, Member
of the EOS Group’s Board of Directors and Chief Financial Officer. “This
co-investment will allow us to grow our business in markets which have
been hard hit by the financial crisis, while sharing risks and upside with
a strong partner.” Owned by Germany’s Otto Group, EOS has more than 30
years experience in debt collection and is a market leader in many CEE
Snezana Stoiljkovic, IFC Director for Central and Eastern Europe, said,
“Dealing with distressed assets is a key component of IFC’s crisis response.
Tackling nonperforming loans will help ensure that banks can continue to
provide access to finance for businesses and individuals, which is essential
for economic recovery.”
The initiative is part of IFC’s Debt and Asset Recovery Program, which
was launched by IFC during the World Bank Group’s 2009 Annual Meetings
in October. IFC will contribute up to $1.55 billion to the DARP over three
years and expects to mobilize additional funding from other international
financial institutions and private sector partners. DARP invests directly
in businesses that need to restructure debt, and in distressed assets and
restructuring funds. The program also invests indirectly via funds targeting
pools of distressed assets. To date, under DARP, deals have been closed
in Europe and Central Asia, East Asia, and Latin America and the Caribbean.
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing capital for private enterprise, and providing advisory and risk
mitigation services to businesses and governments. Our new investments
totalled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
About the EOS Group
The EOS Group is a leading international provider of tailor-made services
covering the entire life cycle of a customer relationship – from customer
acquisition to electronic payment processing, debt collection and purchase
of receivables portfolios. The core business is receivables management.
EOS is committed to high standards of debt collection to protect creditors
and consumers. With over 4000 employees, EOS serves its 20,000 customers
in more than 20 countries worldwide through over 40 subsidiaries. For more
information, visit: www.eos-solutions.com.