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| NPL JV |
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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 | 25745 |
| Company name | Orient Fortune Asset Management Co., Ltd. |
| Country | China |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | June 11, 2007 |
| Projected board date | July 16, 2007 |
| Previous Events | Invested: April 2, 2008
Signed: August 31, 2007
Approved: August 2, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project entails an investment in a green field Joint Venture Company (JVC) in China. The JVC would be established to be a long-term distressed asset resolution and restructuring platform. |
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| Project sponsor and major shareholders of project company |
| The partners in the JVC will be one of the four asset management companies in China and an entity managed by GE Commercial Finance, one of the leading players in distressed assets business in Asia. |
| Total project cost and amount and nature of IFC's investment |
| The proposed registered capital of the JVC will be around $300 – 400 million. IFC is to make an equity investment for 14% equity stake in the JVC. |
| Location of project and description of site |
| The location of the headquarters of the JVC will be a city in China to be determined by mutual agreement between the joint venture partners. The JVC’s investments would be located in various regions of China. |
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| Anticipated development impact of the project |
This project will help address the non-performing-loan (NPL) problem which is one of the most pressing challenges facing China. Specifically, the project will have the following development impacts:
- Resolve existing and future distressed assets in an efficient way
- Improve banks’ balance sheet and capital adequacy
- Establish a sustainable and commercially oriented asset management company
- Promote enterprise restructuring |
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| IFC's expected development contribution |
IFC’s expected development contributions to the project are:
- Leverage IFC’s unique experience in workout and restructuring in emerging markets to support JVC’s business development and capacity building;
- Contribute in establishing a high-standard corporate governance structure based on international best practices;
- Facilitate relationship between the local and the foreign partners. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the project's involvement in the acquisition and restructuring of distressed assets, the project will be required to:
- Develop a Social & Environmental management system/procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, that ensures that all its investments are screened and processed to avoid supporting activities on the IFC FI Exclusion List,
- Review information available in the public domain and avoid investments in sub-projects that have substantial unresolved social or environmental issues,
- Commit to work with the assets it is restructuring to ensure that the projects are operating in compliance with Applicable National Environmental and Social Laws and regulations, or have an action plan to achieve the same within a reasonable time frame,
- Demonstrate commitment and resources to implementing the Social & Environmental management system/procedure, and take action to remedy any gaps in implementation on an ongoing basis,
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Ms. Catherine Chen
GE Commercial Finance - Corporate Financial Services
1266 Nan Jing Road (West) 1206,
Shanghai, China
Telephone: +86 21 62881088 ext. 280
Fax: +86 21 62882210
Email: catherine.chen@ge.com |
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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 |
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