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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 | 21665 |
| Project name | Turkish Leasing |
| Country | Turkey |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Koc Finansal Kiralama A.S. |
| Environmental category | FI-2 |
| Date SPI disclosed | December 4, 2003 |
| Projected board date | January 5, 2004 |
| Status | Completed |
| Previous Events | Invested: May 21, 2004
Signed: April 26, 2004
Approved: February 3, 2004 |
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| Description of company and purpose of project |
| The proposed project consists of a loan facility for two Turkish leasing companies - Garanti Leasing and Koc Lease – which would use the funds to expand their leasing business with SMEs. The primary beneficiary of the project would be SMEs which continue to drive export activity and economic growth in Turkey, and for whom leasing is often the only means of medium- to long-term financing. The proposed project builds on IFC’s previous Turkish leasing projects which have played a critical role in supporting the development of the country’s leasing industry. |
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| Project sponsor and major shareholders of project company |
Garanti Leasing: Garanti Bank, the sponsor of Garanti Leasing, is the third largest private bank in Turkey with $16.2 billion in assets, $1.3 billion of equity and $81 million in net income as of end-June 2003. The Dogus Group owns 68.5% of Garanti Bank, while the remaining shares are traded on ISE. Established in 1951, the Dogus Group, owned by the Sahenk family, is one of the leading conglomerates in Turkey with interests in financial services, construction, automotive and retail. At year end-2002, the Dogus Group had $13.2 billion in assets and $3.7 billion in revenues.
Koc Lease: Koc Financial Services owns 99% of Koc Lease. Koc Financial Services was incorporated in 2001 for the purpose of combining the financial sector companies of the Koc Group. Koc Financial Services is owned 50% each by the Koc Group and Unicredito Italiano. The Koc Group, a multinational conglomerate established in 1926, is a leader in the automotive, household appliances, electronics, food, retail, energy, financial services, hospitality and information technology industries. Eighteen percent of Koc Group’s shares are traded on the Istanbul Stock Exchange (ISE), while the remaining 82% are privately held by the Koc family. The Koc Group’s asset size was $7.3 billion as of end-2002. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at up to $45 million comprising a loan of up to $15 million to Garanti and a loan of up to $30 million to Koc. |
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| Location of project and description of site |
| Garanti Leasing is headquartered in Istanbul, has 9 dedicated regional offices and uses Garanti Bank’s 319 branches. Koc Lease is headquartered in Istanbul, has 3 dedicated regional offices and uses Koc Bank’s 133 branches. Both companies conduct leasing business throughout the country. |
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| Project Development Impact and IFC's Role |
IFC has played a major role in developing the Turkish leasing industry since the mid-1980’s, when it assisted with the drafting of Turkey’s leasing legislation and sponsored the establishment of IGFK, a joint-venture leasing company. IFC has also made loans to Garanti Leasing, TEB Leasing, Koc Lease, Finans Leasing, Alease, Yapi Kredi Leasing, Toprak Leasing, Demir Leasing and Rant Leasing in support of their leasing operations. Investments in leasing companies help IFC to achieve two important objectives, that of providing finance to SMEs, and that of assisting low- and medium-income countries. Broader goals of mobilizing private sector resources and encouraging financial sector diversification are also met.
The proposed project involves two mature leasing companies with a strong presence in the SME sector. IFC’s role will primarily be to alleviate the medium-term funding constraint for these leasing companies and their customers. IFC also will continue to contribute to these companies’ institutional development on environmental issues by helping to frame guidelines and providing management training. As the Turkish leasing sector is still loosely regulated, IFC client leasing companies have significantly benefited in terms of disciplining themselves and adopting international standards thanks to IFC’s financial, operational and environmental covenants. |
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| Environmental and social issues - Category FI-2 |
This is a category FI, type 1 project. The leasing companies, some of whom are existing IFC clients, will be required to prepare an Environmental Management Plan (EMP) that covers as a minimum necessary policies, procedures, and resources. Once drafted the EMPs will need to be reviewed and approved by IFC. If the leasing companies already have IFC approved EMPs, these EMPs will need to be revised to take into account experiences to date and any necessary improvements. Again these revised EMPs will need to be submitted to IFC for necessary review and approval. The leasing companies will be required to nominate a senior officer with overall responsibility for environmental and social issues and an environmental manage/coordinator to conduct project reviews. Again for those leasing companies with staff already identified, they will be required to reconfirm their nominations to IFC. All nominated staff (whether new or reconfirmed) will be required to attend the CEA Workshop. The leasing companies will be required to provide Annual Environmental Performance Reports (AEPRs) to IFC.
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| To contact the project company, please write to: |
Ferruh Eker, Chief Executive Officer
Garanti Leasing
Eski Buyukdere Cad. Ayazaga Koy Yolu
No: 23 34396 Maslak – Istanbul
Turkey
Fax: (+90 212 365 30 01)
Cagatay Baydar, General Manager
Koc Lease
Koc Financial Kiralama A.S.
Kisikli Cad.
No: 28 Altunizade
34662 Istanbul
Turkey
Fax: (+ 90 216 474 09 76) |
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