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| Vyksa Steel |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. |
| Project number | 28077 |
| Company name | Vyksa Steel Works |
| Country | Russian Federation |
| Sector | Primary Metals |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Pending Disbursement |
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| Date SPI disclosed | August 28, 2009 |
| Projected board date | September 29, 2009 |
| Previous Events | Signed: September 30, 2009
Approved: September 30, 2009 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Vyksa Steel Works (Vyksa) is an existing IFC client that is involved in manufacturing of value-added steel products, including Large Diameter Pipes (LDP), Small and Medium Diameter Pipes (SMDP) and railway wheels.
The proposed transaction is a $70 million corporate loan to finance Vyksa’s investment program in the next three years, which includes modernization of SMDP production line as well as implementation of environmental and energy efficiency programs. |
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| Project sponsor and major shareholders of project company |
Vyksa is managed and controlled by one of the largest metallurgical groups in Russia – United Metallurgical Company (OMK), which is owned by a group of reputable Russian businessmen.
The shareholder structure of Vyksa includes:
Free float at the Russian Stock Exchange (RTS) – 13.4%.
CJSC “Metallurgical investment company” (owns 11.3% stake in Vyksa);
CJSC “OMK Service” (owns 27.5% stake in Vyksa);
CJSC “Metalresurscomplex” (owns 47.8% stake in Vyksa). |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated to be around $250 million. The total IFC investment is expected to be up to $70 million. |
| Location of project and description of site |
| The project will be implemented on Vyksa’s production sites. The company is located in Vyksa town in Nizhegorodskaya Oblast (186 km from Nizhniy Novgorod, the regional capital). The plant is conveniently located close by railway, automobile and waterway transportation routes. |
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| Anticipated development impact of the project |
| The investment is expected to have a positive demonstration effect for improvements of environmental, health and safety standards in the Russian Steel Sector. In addition, the Vyksa is a town creating company, employing a significant portion of the local workforce, supporting social programs and generating demand for additional services in the local economies. |
| IFC's expected development contribution |
| IFC will continue to play an important role in assisting OMK to improve significantly its environmental performance. Vyksa has undertaken under the previous investment to close its two existing OHF’s. IFC’s continued involvement with the Company will help focus on this important issue. IFC will provide longer term financing than what is readily available locally and will improve Vyksa’s debt profile and accommodate its investment program especially during the current crisis. |
| Environmental and social issues - Category B |
| The objective of the project is to promote environmental and production upgrades at existing facilities, thereby allowing these facilities to achieve compliance with local regulations and the IFC Performance Standards. The project includes extensive rehabilitation and renewal of production equipment, in addition to improved water recycling and change from ingot to continuous casting technology. As a result of these changes considerable air emission reductions and improved energy efficiency will be achieved at the facilities. |
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| For inquiries about the project, contact: |
Ms. Svetlana Egorova,
Head of Corporate Finance,
OMK Group HQ,
28, Ozerkovskaya naberezhnaya, bld.1
115184, Moscow, Russia |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
OMK plans to publish the announcement of the public disclosure of the ESRS in Vyksa and on OMK Group’s and Vyksa Steel Works’ corporate web-sites: www.omk.ru and www.vsw.ru/ru.
The ESRS will be available for public disclosure at the following locations:
Vyksa Metallurgical works
Bretiev Batashevykh str. 45,
Vyksa, Nizhegorodskiy region |
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