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| 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. |
Summary of Project Information (SPI) |
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| Project number | 11316 |
| Project name | First Lease |
| Country | Ukraine |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | First Lease |
| Environmental category | FI-1 |
| Date SPI disclosed | February 21, 2003 |
| Projected board date | April 28, 2003 |
| Date revised SPI disclosed | May 25, 2004 |
| Status | Completed |
| Previous Events | Invested: April 7, 2004
Signed: December 24, 2003
Approved: October 22, 2003 |
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| Project sponsor and major shareholders of project company |
The project sponsor is Eastern Prospect bv (EPB). The First Lease (FL or the company) is wholly owned by EPB, a Netherlands based entity founded in 1998 to act as a holding company of FL. EPB's main shareholders are as follows:
Eastern Future BV, ultimate beneficiary Robert Speelman, formerly of Mees Pierson. Mr. Speelman is FL’s co-founder and Managing Director of Eastern Prospekt. He is also a member of FL’s Board of Directors and Credit Committee (27.5%).
Martin Elling, formerly of the EBRD, is the co-founder of Eastern Prospekt and member of FL’s Board of Directors and Credit Committee. During his tenure at EBRD, Mr. Elling was responsible for agribusiness and energy projects in Ukraine (22.5%).
Ildom ltd, managed by Theodore Margellos, and investor who has several other business interests Ukraine (22.5%).
Fimbank, a bank incorporated in Malta (15%).
Ducrein BV, ultimate beneficiary René Hooft Graafland (12.5%) |
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| Total project cost and proposed IFC investment |
| The total project cost is $2 million. The proposed IFC investment is an IFC A loan of up to $2 million for its own account. |
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| Location of project and description of site |
FL operates out of its head office in Kiev. The company also has offices in Dnipropetrovsk, Odessa, Kharkiv and Donetsk. FL is also planning to open an office in Lvyv later this year.
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| Description of company and purpose of project |
Established in late 1999, FL is one of the earliest entrants into the Ukrainian leasing sector. FL’s primary product is vehicle leasing/financing for enterprises operating in Ukraine. The company primarily leases cars, light vans, and trucks which are used for monitoring and managing inventory; deliveries; and promotion. The IFC credit line will be used to finance FL's operating lease activities which provide vehicle leasing to commercial enterprises in Ukraine.
FL has also received the approval of a comprehensive technical assistance program (TA) with funding of $130,000 from the government of Holland. As FL is still a young enterprise, the technical assistance project will focus on improving/developing several operational areas to help the company sustain its growth. The TA project will involve the following, among other, components:
integration of FL’s back office and IT systems;
assistance in new product development; and
implementation of a leasing oriented IAS accounting system.
The benefits of leasing to private enterprises, particularly small and medium enterprises (SMEs), are well documented. In Ukraine’s credit-constrained environment, leasing will provide one of the few viable means of financing investments in assets. This is particularly important in the SME sector where the lack effective financial intermediation is acute. Ultimately, a well-functioning leasing sector would play an important role in supporting the capital investment needs of local enterprises.
IFC’s support of FL will help the company expand its leasing activities as well as develop further its internal management and technical systems. IFC’s credit line will provide needed financing to FL in an environment where access to term financing is extremely limited. At the same time, the demand for leasing far outweighs the supply provided by existing leasing companies. In addition, the technical assistance activities associated with the loan will help strengthen various business/operating aspects of the company as noted above. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. First Lease will be required to apply environmental review procedures to relevant operations. IFC will assess First Lease’s capability to carry out environmental reviews.
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| To contact the project company, please write to: |
Mr. Martin Elling
26 Lesya Ukraina Blv.
Office 411
Kyiv, Ukraine |
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