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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 | 23794 |
| Project name | Rise |
| Country | Ukraine |
| Sector | Agriculture And Forestry |
| Department | Agribusiness |
| Company name | Closed Joint Stock Company Rise |
| Environmental category | B |
| Date SPI disclosed | December 20, 2005 |
| Projected board date | January 27, 2006 |
| Status | Active |
| Previous Events | Invested: June 21, 2006
Signed: March 7, 2006
Approved: February 3, 2006 |
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| Description of company and purpose of project |
Closed Joint Stock Company Rise (Rise or the company) is a leader in providing integrated agribusiness services and inputs to farms in Ukraine. Under a one-stop-shop concept, Rise distributes a full-range of agricultural inputs such as seeds, fertilizers, crop protection products and agricultural machinery/spare parts, which are packaged together with value-added services such as agronomic consultancy, product off-take, and transportation, to more than 6,500 farms in Ukraine, Russia and Moldova.
The project is to strengthen the company’s balance sheet by providing longer debt maturities in line with the expected payback from recently made investments through refinancing of the existing debt, which matures in 2006. |
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| Project sponsor and major shareholders of project company |
The project sponsor is Rise, a conglomerate established in 1992. Rise, through five major subsidiaries, operates five main lines of business:
- distribution of imported and local seeds, crop protection products and fertilizers (Rise-Agroservice);
- import and distribution of agricultural machinery and spare parts (Rise-Agretchnika);
- sales of own and clients’ agricultural crop (Rise-Agrotrade);
- agricultural crop farming and farming technology services (Rise-Agro); and
- custom warehouse and transportation services (Rise-Transservice).
The company is owned by Vitaliy Tsehminstrenko (83.11%), Yaroslav Krasnopolskiy (13.72%) and minority shareholders accounting for 3.17%. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $10 million. The proposed investment includes an A Loan of up to $10 million for IFC’s own account. |
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| Location of project and description of site |
| The company operates 49 branches/distribution centers for crop protection products, fertilizers, machinery and spare parts located in various regions of the country and headquarters in Kiev. |
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| Project Development Impact and IFC's Role |
The project is to strengthen the financial viability of the company as it continues to develop its distribution infrastructure to better serve Ukrainian farmers. Capital investments made by the company in the past two years have been financed with medium-term (2-3 years) loans given the constraints of the Ukrainian financial markets. IFC’s assistance in refinancing $10 million of existing short- and medium-term debt maturing in 2006 with longer debt maturities will provide a sounder financial structure, in line with the expected payback of Rise’s capital investments, estimated at 4-5 years.
IFC’s role in this project will be to provide long-term financing, still unavailable in the market and to inject liquidity in a local company, which provides valuable service to the Ukrainian farming community.
Through project appraisal, IFC has played a role in assisting the company in revising its business plan and management practice, resulting in the company-wide revision of its strategic development plan, cancellation of several risky investments in the non-core business areas and strengthening of its management team through incentive-based packages to key members of the management team.
IFC’s participation in the financing of Rise will increase transparency, as the company agreed to produce annual audits of its financial statements in accordance with IFRS. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety, and social impacts of the project were analyzed.
- Liquid wastes management and air emissions;
- Hazardous material management;
- Solid/hazardous waste management;
- Occupational health and safety;
- Environmental, health, and safety (EHS) management system;
- Fire prevention and emergency response;
- Rail terminals;
- Pesticide and integrated pest management; and
- Community relationship and community development.
The sponsor has presented an action plan to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements of the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The ERS will be available at the following location:
National University
"Kievo-Mohila Academy"
St. Skovorody, 2,
04070, Kiev
Ukraine |
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| To contact the project company, please write to: |
Alexey Pavlenko, General Director
152 Akademika
Zabolotnogo St,
03143, Kyiv,
Ukraine
Tel: +380-44-252-13-80
Fax: +380-44-252-5780 |
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