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| Avtokran |
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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 | 27465 |
| Company name | Avtokran OJSC |
| Country | Russian Federation |
| Sector | Industrial & Consumer Products |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Pending Approval |
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| Date SPI disclosed | July 21, 2009 |
| Projected board date | September 3, 2009 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project is to assist Avtokran (“Avtokran” or the “Company”), Russia’s leading producer of truck mounted cranes, to complete its modernization program for 2008-2009 and partially refinance its short term debt. The modernization program at Ivanovo and Kamyshin plants is aimed at improving production quality and efficiency and comprises following investments:
(a) purchase and installation of a new state-of-the-art boom manufacturing line to produce profiled higher capacity booms;
(b) the purchase of various welding and metal cutting equipment to replace outdate assets;
(c) Part of the IFC financing will be used to refinance the existing short term indebtedness.
Avtokran and the associated group companies manufacture (i) truck mounted cranes with hoisting capacity of up to 100 tons including special chassis truck cranes and slewing rings, (ii) chassis for cranes and other heavy-duty equipment and off-road heavy duty trucks with capacity from 14 to 36 tons. |
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| Project sponsor and major shareholders of project company |
| Avtokran is owned by a diversified group of shareholders. Four main shareholders are the legal entities - Alasse Holding, a BVI company controlling 24.999% of Avtokran; Ursham Holding, a Belize company controlling 24.405%; Machine Technology Ltd., a Belize company controlling 24.905% and OOO EdemStroyInvest a Russian company controlling 22.7%. The aforementioned legal entities are controlled by two reputable Russian businessmen. The remaining shareholders own 2.99% of Avtokran and are represented by the company employees or individuals that own minority stakes in the company. |
| Total project cost and amount and nature of IFC's investment |
| The estimated cost of the project is approximately $88 million equivalent. IFC is planning to provide Avtokran with an A loan of up to $15 million equivalent and a C loan of up to $10 million equivalent. |
| Location of project and description of site |
The Company has two main production facilities, both located in frontier regions of Russia:
Avtokran, main production facility in of Ivanovo, Central region, which produces truck mounted cranes with hoisting capacity of up to 100 tons, special chassis truck cranes and slewing rings from 600 to 3,000 mm in diameter.
GazpromKran, located in Kamyshin in the Volgograd region, producing cranes with hoisting capacity of 32-50 tons. |
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| Anticipated development impact of the project |
| The project would contribute to contributing to the survival and development of machine building sector where the country has a comparative advantage, and towards the overall diversification of the economy. The Project will also provide a demonstration effect from of successful installation and use of the modern technology and strengthening JSC Autocrane business practices with special regard to operational efficiency. In addition, the project will directly and indirectly help to sustain more than 5,000 jobs. |
| IFC's expected development contribution |
Through this proposed investment, IFC will be:
supporting a leading Russian producer of cranes,
contributing to the development of machine building sector; supporting expansion of economic activity in two
frontier regions of Russia;
promoting international quality product development, as well as environmental and safety standards in a company
that is over 50 years old and is undertaking a serious modernization process; |
| Environmental and social issues - Category B |
This in an environmental and social category B project.
The most important social and environmental issues in the existing project are emissions to air and water, labor and working conditions, occupational health and safety, and effective management of these issues. The planned investment program will reduce air emissions, while other environmental impacts are already well mitigated. Environmental and occupational health and safety management capacity will be strengthened and formal and certified management systems developed.
It is therefore concluded that potential adverse social and environmental impacts are limited and may be readily mitigated. This is therefore a Category B project. |
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| For inquiries about the project, contact: |
Company contact:
OJSC Autocrane, Ivanovo,
str. Nekrasova, 61
www.cranes.ru |
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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 |
| Local access of project documentation |
Project documentation will be made available at the following location:
OJSC Autocrane, Ivanovo,
str. Nekrasova, 61 |
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