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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 | 24723 |
| Project name | Delta Leasing II |
| Country | Russian Federation |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | ZAO DeltaLeasing |
| Environmental category | FI-1 |
| Date SPI disclosed | January 17, 2006 |
| Projected board date | February 18, 2006 |
| Status | Active |
| Previous Events | Invested: August 14, 2006
Signed: June 9, 2006
Approved: May 23, 2006 |
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| Description of company and purpose of project |
ZAO DeltaLeasing (DeltaLeasing or the company), previously known as Delta Lease - Far East, is a leasing company based in Vladivostok with offices in Yuzhno-Sakhalinsk (Sakhalin Island), Khabarovsk, and Novosibirsk (Novosibirsk office serves as a hub-office for Siberia region with smaller regional offices opened in Omsk, Tomsk, Krasnoyarsk, Irkutsk, and Barnaul). The company has been in operation since 2000 and is entirely owned by the U.S. Russia Investment Fund (TUSRIF).
DeltaLeasing primarily provides financial leases to its clients with a specific focus on servicing the needs of Small and Medium size Enterprises (“SMEs”). As of September 30, 2005, DeltaLeasing had total assets of USD26.2 million.
This proposed project of an aggregate amount of up to $16 million consists of a 5-year senior A loan of up to $6 million and a 3-year syndicated B loan of up to $10 million. Both loans may have an option of Ruble-linked feature. The purpose of this project is to provide long term funding to DeltaLeasing to enable the company to meet the strong demand for longer term leasing products in the SME sector of the Russian Far East and Siberia regions. |
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| Project sponsor and major shareholders of project company |
| DeltaLeasing is entirely owned by TUSRIF, a private investment fund that was established in 1995 and funded by the U.S. Congress. Historically, TUSRIF's activities included direct equity investments and the provision of financial services through wholly owed investee companies (i.e. leasing, mortgage finance and commercial banking). TUSRIF is no longer active in new investments, which are handled through Delta Russia Fund, a more recently established private successor fund. Both TUSRIF and the Delta Russia Fund are managed by Delta Private Equity Partners (http://www.deltacap.ru/eng/). |
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| Total project cost and proposed IFC investment |
The total project consists of:
- a senior A loan of up to $6.0 million for IFC’s own account and
- a syndicated B loan of up to $10 million. |
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| Location of project and description of site |
| The company is located in Vladivostok, Russian Federation, and has 9 branches throughout the Russian Far East and Siberia regions. |
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| Project Development Impact and IFC's Role |
Small and medium-sized enterprises (SMEs), especially in the Far East and Siberia regions, have been underserved by the banking system in Russia, especially with regards to access to mid- to long-term term funding, which significantly limits their development and growth.
The proposed project will:
- support SME sector development with medium term and long term financing in the Russian Far East and Siberia,
- support one of the better managed leasing companies in the Russian Far East and Siberia regions and thus facilitate the development of a leasing sector,
- further help the company diversify its funding base and target more clients with mainly Ruble revenues by offering an option of Ruble-linked financing, and
- would help expand the access of DeltaLeasing and potentially other Russian leasing borrowers, to the syndicated loan markets in the Russian Rubles and for long-term maturities.
IFC’s role is:
- to provide funding of longer maturity and in local currency, which is not available for DeltaLeasing from local sources; and
- to support and facilitate development of the Russian Far East and Siberia regions. |
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| Environmental and social issues - Category FI-1 |
This is a Financial Intermediary (FI) Type 1 project according to IFC's environmental and social review procedure. Under IFC's existing investment, the Company attended the IFC training and nominated responsible officers, provides annual environment performance reports and has been performing satisfactorily. For the duration of IFC's new investment, DeltaLeasing will be required to maintain its environmental management system to ensure that investments under relevant operations meet host country environmental, health and safety requirements and to continue to provide IFC with an annual environment performance report.
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| To contact the project company, please write to: |
Oleg Rakitsky, CEO
ZAO DeltaLeasing
Bld. 12-13 Okeansky Prospect
690091 Vladivostok,
Russian Federation
Gregory Sundstrom, Chairman
Vice President, The U.S. Russia Investment Fund
e-mail: gregorys@online.ru
Phone/Fax: +1 (604) 872-7546
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