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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 | 25050 |
| Project name | TV3 Russia III |
| Country | Russian Federation |
| Sector | Information |
| Department | Global Inform. & Comm. Tech. |
| Company name | Independent Network Television Holdings, Ltd. |
| Environmental category | C |
| Date SPI disclosed | April 26, 2006 |
| Projected board date | May 30, 2006 |
| Status | Completed |
| Previous Events | Invested: November 8, 2006
Signed: August 31, 2006
Approved: August 4, 2006 |
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| Description of company and purpose of project |
TV3 Russia (TV3 or the company) is a free-to-air television broadcasting group in Russia, and an existing client of IFC. TV3 focuses on broadcasting entertainment-related content to a potential audience of 54 million viewers (37% of the Russian population) through a group of 57 terrestrial affiliate stations, 20 of which are 100% subsidiaries of the company. The company’s activities are consolidated in a sole purpose holding company, called Independent Network Television Holding Limited (“INTH”), incorporated in Cyprus.
TV3 has implemented a growth strategy over the last few years involving both organic growth and the acquisition of select television stations as the company has expanded its broadcasting network across Russia. To continue its growth path and take advantage of the expected high growth rates of the advertising market in Russia, the company intends to raise new debt of about $40 million to:
- refinance its existing long-term debt;
- further improve programming; and
- further fund the Group’s acquisition program. |
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| Project sponsor and major shareholders of project company |
| At present, the Group’s shareholders consist of a diverse group of Western strategic and financial investors, as well as individuals active in the media sector. The largest shareholders are Act III Communications, a Los Angeles-based multimedia holding company, Botts Capital Nominees and The US-Russia Investment Fund, which together hold more than 50% of the shares of the Company. |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated to be approximately $75.0 million. The proposed IFC investment is up to $22 million A Loan for IFC’s own account. |
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| Location of project and description of site |
| TV3 is headquartered in Moscow, with affiliates located throughout Russia. The company’s 20 wholly owned and operated affiliates broadcast in: Moscow, St. Petersburg, Barnaul, Krasnodar, Ufa, Kemerovo, Perm, Omsk, Stavropol, Kazan, Voronezh, Saratov, Samara, Chelyabinsk, Volgograd, Vladivostok, Vladimir, Ussuriysk, Tver and Irkutsk. |
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| Project Development Impact and IFC's Role |
The project is expected to:
- support independent media in Russia;
- contribute to the continued growth of Russia’s advertising industry by providing an additional outlet for advertisers;
- continue to support the growth of small and medium-sized enterprises that are unable to advertise on larger broadcast stations; and
- continue to develop the capabilities of local affiliates in many of Russia’s regions where development is slower.
IFC would be playing multiple roles in this investment, including:
- providing funding to a Russian company in a sector often perceived as risky;
- encouraging TV3 to expand its operations into the regions to accelerate the development of the local media markets;
- mobilizing additional long-term debt financing from an international commercial bank for the first time with this Company; and
- encouraging other investors to participate in future funding rounds. |
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| Environmental and social issues - Category C |
This is a Category C project based on the IFC's environmental and social review procedure. TV3 III should ensure that all operations comply with applicable environmental, health and safety laws and regulations of the Russian Federation.
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| To contact the project company, please write to: |
Mr. Mitchell Krasny, Chief Financial Officer
TV3 Russia
4/4 Akademika Koroleva St.
Moscow 129515
Russia |
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