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Transcript
Working with the European Bank for Reconstruction and Development Presentation to the European Broadcasters Union 29 October 2012 1 The European Bank for Reconstruction and Development (EBRD) at a glance 1 International Financial Institution Established in 1991 and owned by 63 countries and (1) the EU and EIB 2 Solid financial position AAA rating and a capital base of EUR 30bn 3 Development mandate To foster transition towards open and democratic market economies and promote entrepreneurship 4 Largest investor in the region In 2011 Annual Business Volume amounted to EUR9.1bn comprising 380 projects (1) 57% of shareholding is G7 and 84% is OECD country based. EU27 countries hold 62.8% of the shareholding. 2 The EBRD’s Objectives Promotes projects that expand and improve markets and help build institutions that underpin the market economy Transition Impact Project returns are commensurate with risks Supports, but does not replace, private investment. Provides financing at reasonable terms EBRD Sound Banking Additionality 3 EBRD operates across 33 countries, 40 regional offices and 3 continents Central Asia and Mongolia Kazakhstan Kyrgyz Republic Mongolia Tajikistan Turkmenistan Uzbekistan Eastern Europe and the Caucasus Armenia Azerbaijan Belarus Georgia Moldova Ukraine EBRD headquarters EBRD country of operation Southern and eastern Mediterranean Egypt Jordan Morocco Tunisia Central Europe and Baltics South-Eastern Europe Croatia Estonia Hungary Latvia Lithuania Poland Slovak Republic Slovenia Albania Bosnia and Herzegovina Bulgaria FYR Macedonia Romania Montenegro Serbia 4 Russia Turkey ..throughout a number of industries and sectors Agribusiness Power and Energy Climate Finance Property and Tourism Manufacturing and Services Natural Resources Transport Financial Institutions Municipal Infrastructure Information and Communication Technologies (ICT) 5 Equity Funds EBRD provides wide financing solutions “Typical” investment profile Typical Size Term/Holding period Instruments Currency Ticket size from a low single digit EUR mn amount to over EUR 100 mn Debt instruments: typically from 7 to 10 years Equity Investments and Guarantees: typically from 3 to 7 years Debt: public and private instruments, fixed and floating, syndicated loans, bonds Equity: Private Equity, IPO Quasi Equity: mezz, convertible loans, subordinated loans Local and major currencies (US$, EUR, RUB, etc.) Investments approach/Limits EBRD typically acts as a co-investor along other sponsors EBRD’s stake typically does not exceed 35% of the total investments (equity and debt) or 50% in case of syndication with other international banks Applications Growth capital, acquisition and consolidation, non-exclusive bidding support, working capital, green/brown fields, JVs, privatization Exact financing terms are defined by specific project circumstances 6 EBRD’s objectives achieved through financing the private sector € billion 12 As at end June 2012: – €3.4 billion invested in 153 projects – Private sector accounted for 79% share – Debt 84% & Equity 16% 75 70 10 65 60 55 8 50 45 6 40 35 30 4 25 20 Net cumulative business volume Invested over €75.2 billion in more than 3,468 projects since 1991 Annual business volume (ABV) 80 15 2 10 5 0 0 Debt ABV 7 Equity ABV Net Cumulative Business Volume Cooperation with EBRD offers companies numerous advantages 1 2 Long-term investor Structured solutions • • • • EBRD aims to develop long-term relationships - typical investment horizon is up to 10 years with longer financing available The Bank relies on a buy-and hold approach, which decreases its dependence on the short term market fluctuations Transactions are tailored to the needs of the clients and a variety of financial structures are considered Non-standard structures are welcome and a large range of transaction sizes 3 Sector knowledge & local expertise • Deep knowledge and sector expertise proven by more than 140 executed projects in the ICT sector 4 Strong ties with Local & Federal Governments • EBRD has established strong and long lasting connections with Local and Federal Governments that allow the Bank to promote and defend interests of its portfolio companies 5 Preferred Creditor Status • EBRD has a Preferred Creditor Status, which exempts payments to EBRD generalised moratoria and foreign exchange controls. It allows EBRD to provide financing even in the hardest market conditions 8 Transparency, sound business principles and TI are the key criteria for the projects financed by EBRD 1 2 3 4 Transparent Shareholding Structure • Strong Business Fundamentals • Sound business model with a clear return to the Bank from the main operations rather than from alternative sources Audited Financial Statements • At least 3 years of financial statements audited by reputable international or local auditing firms and prepared in accordance with IFRS Transition Impact (TI) • Impact on the local economy in line with the Bank’s mandate to facilitate transitioning to the market economy • Full transparency of the ownership structure and complete disclosure of the end beneficiaries High level of integrity both among owners and managers and high standards of corporate governance 9 Project Timeline EBRD project cycle 1 2 Concept Review Contact initiated Define concept Initial company and project information review Mandate letter to initiate transaction Mandate letter Signed 3 Project Structure Approval 4 Final Structure Approval Due Diligence: Financial, Legal and Technical Finalizing the deal terms Drafting legal documentation (term sheet) Term sheet Signed 5 Board of Directors Approval The Board makes a final review and approves the project Signing Funds are ready to be disbursed Legal Documents Signed The whole process timing is dependent largely on the various specific circumstances and the availability of relevant information. 10 ICT Sector Selected Subsectors Comments Cumulative Financing to date: ca. €4bn Current Portfolio: €1bn 140 transactions from low single digit million to €200mn amount 15 dedicated employees • Mobile & fixed line • ISPs • Cable TV • Towers • Satellites • Data centres • Fibre • Wireless broadband • MVNO • Pay-TV • Mobile payments • Content production • B2B publishing • Cinema chains • Outdoor advertising • IT services • Software developers • Systems integrators • Call centres • Internet • Cleantech • Semiconductors • FDIs Investments into the ICT sector are viewed as a key tool in modernizing the local economy and increasing its innovation and competitiveness 11 ICT Sector Investments Eurovision Russia Towers - equity investment to finance shared communication infrastructure for mobile and fixed wireless telecom operators in Russia Emitel – financing an investment programme including (i) new digital terrestrial broadcasting services, and (ii) expansion of telecoms tower services as an independent tower operator 12 ICT Sector Investments: Financing Digitisation • Broadcaster’s need digital infrastructure, including network and digitisation equipment, to respond technological changes and ensure preservation of existing cultural heritage. • EBRD financing available for bankable operations (i.e., revenue generating project and/or sovereign guarantee) that are consistent with mandate. • Potential revenue streams: • Fees for use of digital library • Creation of cinema pre-shows mixing advertising, branded entertainment and local content • Use of the digital infrastructure for non-public purposes: sports, industrial, commercial, etc. • Fees from distribution to cable channels for expatriate viewing 13 EBRD Legal Transition Programme ICT sector support - overview Focus on development of sector/optimising its impact across the economy • Attraction of investment • Introduction, enhancement or maintenance of competition • Balancing incentive to existing players to invest with access based competition Helps with identification of investment bottlenecks • Absent or short-sighted policies • Absent or flawed laws • Absent or weak institutions • Absent or outdated methodologies • Absent or weak capacity EBRD Legal Transition Programme ICT sector support - overview • Works with government to modernise policy/regulation to encourage investment • Policy dialogue • Technical cooperation support • Outreach • Linked to actual Bank investment projects, whenever possible EBRD Legal Transition Programme Examples of activities and locations • Activities • Training and capacity building • ICT policy development • Primary and secondary law drafting and adoption • Regulatory implementation • High-speed broadband roll-out framework • Digital Broadcasting Switchover policy and implementation • Radio frequency spectrum rationalisation • Infrastructure access and sharing • Countries: Albania, Armenia, Azerbaijan, Georgia, Jordan, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Montenegro, Serbia, Tajikistan, Ukraine Selected projects the ICT team executed in the past across all countries of operations (1/2) Russia Convertible Loan USD 30 million 2012 Russia Investment in Bond Offering Turkey Loan Regional Equity Investment via Venture Capital Facility Euro 100 million 2012 2012 Poland Russia Equity Investment Euro 10 million 2011 Russia 2011 Loan Euro 43 million Euro 15 million 2012 2012 2011 Russia Croatia Russia Convertible Loan Syndicated Loan USD 11 million USD 20 million 2009 2010 Albania Russia Poland & Balkans Regional Equity Investment Loan and Equity Investment Fund Investment Euro 30 million Euro 22 million USD 30 million 2011 2009 2009 Privatization Syndicated Loan 17 Poland Loan Convertible Loan Equity Investment Romania Euro 4 million 2010 Equity Investment Euro 200 million Euro 258 million 2009 Poland Regional Privatization – Equity Investment Equity Investment Euro 27 million Euro 49 million 2008 2008 Euro 20 million 2008 Selected projects the ICT team executed in the past across all countries of operations (2/2) Georgia & Bulgaria Loan and Equity Investment USD 35 million Russia Syndicated Loan USD 35 million Euro 22.3 million Euro 130 million Euro 3 million EUR 50 million 2006 2006 Bulgaria Privatisation – Loan and Equity Investment Euro 93 million 2007 Serbia Kazakhstan Albania Poland Syndicated Loan Syndicated Loan Loan Euro 17 million 2004 2004 Czech Republic Romania Poland Syndicated Loan Loan Loan Euro 151 million 1997 - 2002 2005-2007 Loan and Equity Investment 2003-2005 2002 Regional Equity Investment Russia USD 35 million Bulgaria Syndicated Loan 2007-2008 USD 72 million Kazakhstan Equity Investment 2008 Syndicated Loan Ukraine Loan and Equity Investment USD 110 million 2003 Regional Equity Investment Euro 75 million 2001 Euro 32 million 1999 18 Euro 100 million 2003 Euro 52.5 million 2003 Regional Regional Loan Equity Investment Euro 81 million 1998 Euro 65 million 1998 The European Bank for Reconstruction and Development contact Investment Opportunities contact: Legal Transition programme contact: Director ICT Team Industry, Commerce & Agribusiness Paul Moffatt Legal Transition Team Office of the General Counsel Telephone : + 44 207 338 7855 Telephone : + 44 207 338 7453 EBRD One Exchange Square London EC2A 2JN ( 19