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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 24974 |
| Project name | Ekim Turizm Ticaret ve Sanayi A.S. II |
| Country | Turkey |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Ekim Turizm Ticaret ve Sanayi A.S. |
| Environmental category | C |
| Date SPI disclosed | April 26, 2006 |
| Projected board date | May 31, 2006 |
| Status | Active |
| Previous Events | Invested: December 21, 2006
Signed: June 26, 2006
Approved: June 19, 2006 |
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| Description of company and purpose of project |
| The proposed project involves the structuring and implementation of an asset-backed securitization (ABS) program consisting of an immediate warehousing loan of up to Euro 40 million to and a credit enhancement facility (CEF) of up to Euro 20 million to Ekim Turizm Ticaret ve Sanayi A.S. (Intercity or the company), an existing IFC client and the leading fleet management and vehicle leasing company in Turkey. The lease receivables financed by the warehousing loan are expected to be used as assets to back the securitization issuances under the proposed ABS program. The objective of the project is to enable the company to diversify its funding base by accessing more competitive and sustainable term funding both in the domestic and international capital markets. |
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| Project sponsor and major shareholders of project company |
| The company is presently fully owned by International Automotive Holding B.V. (Intercity Holding), a Dutch holding Company. Intercity Holding is owned by Vural Ak (62.6%), the founder and general manager, and a group of financial investors consisting of Turkven Private Equity (10.3%), Advent International Corporation (10.3%), IFC (8.9%), DEG (4.7%) and FMO (3.2%). Advent International is a reputed global private equity firm with a presence in 25 countries. It has over $6 billion in assets under management. Turkven is a $44 million Turkish private equity fund, managed by Turkish investment professionals and affiliated with Advent, in which IFC is a $10 million equity investor along with FMO, DEG and EIB. |
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| Total project cost and proposed IFC investment |
| The proposed IFC Investment is for a warehousing loan of up to EUR40 million for IFC’s own account. In case of B Loan interest, A Loan amount will be reduced to accommodate participant banks. The Credit Enhancement Facility of up to EUR20 million is intended to support the ABS program. |
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| Location of project and description of site |
| The company is headquartered in Istanbul, Turkey, with vehicle servicing operations in Istanbul, Izmir and Ankara. |
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| Project Development Impact and IFC's Role |
The proposed project has a significant development impact:
It will contribute to financial sector deepening in Turkey through the development of the capital markets by setting a benchmark for independent companies to consider securitization as a viable financing option, a source of funding more readily availed only by Turkish banks until now.
The project will have a significant impact in alleviating a major constraint facing such leasing companies in Turkey – secure access to longer tenor financing in foreign currency.
It will assist the growth of operational leasing in Turkey and allow Intercity to increase its SME clientele.
With a second investment, IFC will continue to play a key institution-building role in the growth and transformation of an SME company into a larger, more viable business. By providing credit enhancement for the proposed securitization, IFC will assist the Company access the capital market, which it would not be able to on its own, thus helping it diversify its sources of financing, establish a secure funding base and expanding its operations more effectively.
IFC’s country strategy in Turkey is focused on investment support and technical assistance to the financial sector, access to longer term funding for the private sector, restructurings, recapitalization of portfolio companies, privatization, as well as supporting firms with good export prospects. In the financial sector, IFC is currently active in: (a) working with various financial intermediaries to strengthen their funding capacity and to use them to channel credit to the private sector; and (b) institution building and support for activities such as leasing, mortgage finance and contractual savings institutions.
Given its strong focus on supporting an SME business and promoting an important logistics support provider, the proposed project is a good fit with the IFC strategy for Turkey. |
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| Environmental and social issues - Category C |
This is an environmental category C project according to IFC’s procedure for Environmental and Social Reviews of Projects. The previous transaction was a category B project, under which Intercity is required to meet both Turkish and IFC EHS requirements. The Company is currently meeting these requirements and has obtained the ISO 9001 (Quality) certification. The Company will be strongly encouraged to obtain ISO 14001 (Environmental Management) and OHSAS 18001 (Occupational Health and Safety) certifications.
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| To contact the project company, please write to: |
Vural Ak, General Manager
Ekim Turizm Ticaret ve Sanayi A.S.
Dudullu Organize Sanayi Bolgesi, 3. Cadde, G-131 Sokak, No: 26
34775 Yukari Dudullu
Istanbul / TURKEY
+90 (216) 314 09 50
+90 (216) 314 07 66
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