Finance for Companies in Romania
European Bank for Reconstruction and Development
© European Bank for Reconstruction and Development 2012 | www.ebrd.com
Executive Summary
 What is the EBRD?
— AAA rated international financial institution
— Largest lender and private equity investor in CEE and CIS
(current portfolio of more than €36.9 billion)
— Largest investor in Romania (more than €5.6 billion)
 Key advantages
— Strong, internationally recognised financial partner
— Political leverage due to EBRD’s unique mandate and shareholder
structure
— EBRD's reputation due to thoroughness of due diligence and
choice of local partners
 Working with the EBRD
— Direct financing of companies
— Wide range of financing structures customized to project
characteristics
— Debt, Equity, Quasi-equity/Mezzanine
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Five reasons we are different
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A reliable and stable partner with a local team committed to Romania that has no
funding constraint, staying with its clients in difficult times
Offering flexible debt, mezzanine and minority equity financing with a long term
perspective and possibility of repeat financing
Able to add value through:
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Specialist due diligence expertise in energy efficiency, environment, industry sectors and equity structuring
Strong relationships with State institutions
Our network throughout the region
Our reputation
Strong capacity to mobilise commercial co-financing for larger and more complex
transactions involving complex investment plans, restructuring or reorganisations, and
complex financing structures with many parties
Ability to address the middle market. Very good partner for local entrepreneurs that
adds value at the board level but is one of the few financial investors willing to take a
minority stake
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Don’t just take our word for it
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EBRD understood our complex funding requirements and worked tirelessly with us
to build a solution and mobilise other banks
– Marian Nastase, CFO
Alro/Vimetco
EBRD was able to provide the right form of financing structure which enabled
Kaufland Romania and Lidl Romania to expand faster in more remote and
deprived regions of Romania. EBRD has also been a valuable partner and has
supported Kaufland and Lidl in their efforts to become more conscious of the
socially and labour aspects of their operations
– Karsten Dahlem, Geschäftsführer Finanzierung International, Schwarz (Kaufland/Lidl)
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EBRD helped me grow my business from a start up to a significant player in the
tissue market
– Ioan Tecar, majority shareholder, Pehart
The funding requirements of our growing business evolved rapidly but EBRD were
adaptable enough to provide solutions
– John Ball, President UAC Europe
EDRD is supporting our strategy of rapidly developing digital and broadband
services which will increase its competitiveness
– Dinu Malacopol, CEO Digital Cable Systems
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Table of Contents
1. Introduction to EBRD
2. EBRD Financing Approaches
3. Case studies
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1. Introduction to EBRD
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What is the EBRD?
 An international financial institution
established in 1991, owned by the
governments of 63 countries and 2 intergovernmental institutions (EU, EIB)
Shareholders Breakdown
 Headquartered in London, the EBRD
invests in 29 countries from Central and
Eastern Europe to Central Asia
 Office in Bucharest for 20 years with 16
bankers
 In 2011, the Bank expanded its operations
to include Egypt, Morocco, Tunisia, and
Jordan
 EBRD has a AAA rating from all three main
rating agencies (S&P, Moody’s and Fitch)
Note: As of September 1st, 2010
Footnotes
(1) Includes European Community and European Investment
Bank each at 3%; France, Germany, Italy, UK each at 8.6%
(2)
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Russia at 4%
Where we operate
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EBRD since 2000
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Facilitates inward and cross-border
investments in the region
80
70
Works with locally owned as well as
international companies
Private sector focused
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50
Direct financing of companies
€ Billion
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Indirect financing through local banks
Finances projects in all sectors
A capital base of €30 billion and
circa €71 billion cumulative
commitments
380 new projects signed in 2011
with total commitments of over €9
billion
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20
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0
'00 '01 '02
'03 '04 '05
'06 '07 '08
'09 '10 '11
Cumulative commitments of circa €71bn
Unaudited as at 31st December 2011
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EBRD in Romania
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Cumulative number of projects: 314
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Total project value: €16.5 billion
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Net cumulative business volume: €5.7
billion
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Cumulative disbursements: €4.7 billion
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Private portfolio share: 76%
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Portfolio: €2.9 billion
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EBRD: Key Sectors in Romania
The EBRD’s focus is on:
 the corporate sector
(manufacturing, agribusiness and
ICT)
721
700
117
595
600
€ Million
 financial institutions (SME targeted
and energy efficiency loans)
800
449
500
315
400
317
326
103
300
200
85
257
263
289
100
-
2008
 energy and energy efficiency
 infrastructure (including co-financing
with EU structural funds)
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184
60
83
2009
2010
2011
Corporate
Energy&Infrastructure
Financial Institutions
Total
Romania – 2011 Highlights
 30 projects for around €450 million, mostly private sector
 40 per cent of these focused on energy efficiency
 syndicated over €170 million and mobilised over €1.4 billion of financing
 In the commercial sector:
– Mezzanine financing for Industrial Mecano, a local packaging company
– Equity investment in Green Park, a recycling businesses
– Senior loan to Energobit to finance its energy efficiency subsidiary
– Syndicated loan to oilseed crusher Expur
– Loan to Agripoint Port Terminal, to expand a grain logistics facility in Constanta
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2. EBRD Financing Approaches
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EBRD: Financing Structures Tailored to Project Needs
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EBRD operates commercially and can offer longer tenors, local currency loans
in selected countries and other innovative products
EBRD is willing to share commercial risk under different financing structures
EBRD invests in a broad range of instruments across the capital structure with
various types of debt and equity participations:
 Debt
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Senior, subordinated, or convertible loans
Long term (up to 10 years or more) and short term loans
Floating or fixed rate loans
USD, Euro, or RON loans
 Equity
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Minority positions (usually up to 35%)
Common or preferred stock
Mezzanine finance
 Other instruments
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Guarantees
Currency swaps
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EBRD: Financing objectives
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Through its investments in commercially sound projects, the EBRD aims to promote open
market economies in its countries of operation
EBRD’s key objectives in financing companies are as follows:
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Support private and entrepreneurial initiatives by engaging in long term partnerships to help
developing businesses
Be additional to private sector finance by participating in projects that commercial banks or private
investors are reluctant to undertake
Engage in policy dialogue with authorities, where necessary, to improve regulatory and legal
frameworks for business
Be a leader in supporting strong corporate governance, introducing best practices and raising
industry standards
Mobilise significant foreign direct investments, supporting companies in unfamiliar and sometimes
challenging environments
Provide a wide variety of financing alternatives, innovative products, and international sources of
funding to help support companies to the next stage of development
Encourage environmentally sound and sustainable development by identifying cost effective
energy efficiency investments within every project
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EBRD: Investment terms
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Flexibility of instruments offered –equity, quasi-equity, loans plus combinations
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Capacity to invest between €4/5 million and €200 million
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Equity: minority investor only – up to 35%
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Debt/mezzanine: up to 35% of total balance sheet or project costs
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Appetite for risk whilst supporting, rather than replacing, private investors
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Focus on environmentally sound projects
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EBRD: Debt Finance
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Maturity and interest rates depend on the project’s risks associated with the project
structure, client and market conditions
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EBRD can offer longer maturities than the commercial banks
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EBRD can provide large amounts of finance where needed
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Availability of financing for long term working capital
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Excellent relationships with commercial banks: access to commercial co-financing
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Loan Syndications (A/B structures)
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Mezzanine / subordinated debt
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EBRD: Equity Investments
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Companies that cannot expand with debt alone
Owners who see the benefits of sharing equity and EBRD support in
strengthening corporate governance
Growth potential and strong competitive prospects in local markets and export
markets
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Sound financial basis and financing plans
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Well-developed business plans and capacity to implement them
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Clear exit route for the Bank – sale to strategic or financial investor or an IPO
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Typical holding period for the Bank is 4-6 years
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EBRD: Project Cycle
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Provided all necessary information is
available, a project from Origination to
Board Approval typically takes 3 to 6
months, depending on the complexity,
length of negotiations and other factors
Stages of Project Cycle
9. Com pletion
The total project cycle from origination to
final repayment can range from 1 year, for
working capital or trade financing projects,
to 10 years for long term investments
EBRD financing in individual projects has
ranged from less than €1 million to more
than €150 million
1. Origination
2. Concept Review
8. Sale of Equity
3. Structure Review
7. Repaym ents
6. Disbursem ents
5. Legal Docum entation
& Board Approval
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4. Final Review
Sectors of Expertise
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• Agribusiness. Entire food chain:
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Agricultural inputs
Production
Primary processing
Food processing
Food packaging
Food services and distribution
• Property & Tourism:
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Offices and business centres
Logistics centres and warehousing
Retail malls
Manufacturing & Services:
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Hotels and resorts
Property Funds
• Information & Communications Technology
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Broadcasting and Communications
Information Services and Data Processing
Knowledge economy
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Metals: steel and non-ferrous metals
Capital and intermediate goods
Automotive
Forestry and paper
Construction materials
Chemicals
Health and pharmaceuticals
Consumer goods
Logistics and retail
Aerospace industry
Romania: Selected Clients
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Clients of the EBRD in Romania range from major international industry players
to local medium and small sized companies
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3. Case Studies
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Pehart Tec Romania
Project Summary
Client
Pehart TEC
Signed in
2009
Country
Romania
Product
Equity
Sector
Pulp&paper
Amount
EUR 6mn
Highlights
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Pehart Tec Romania is the third largest player in Romanian tissue production sector. Its sales include
tissue paper (from pulp) and finished products (from tissue). The company has its own brand, Pufina,
and sells its products to large retail chains such as Metro, Lidl, Auchan, Profi and Cora. It exports to
Germany, Hungary, Greece, Bulgaria and Serbia.
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EBRD provided EUR 6 million for a 25% share of the company’s equity. The funds were used to by
investing in a new paper machine and converting line. The purpose of the Bank’s financing was to
support the Company to focus on finished products with higher added value.
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EBRD’s value added is threefold: it provided new capital with no immediate impact over the cash flow; it
is a reputable partner who helped improve the company’s corporate governance; the Bank’s Board
member is a very experienced consultant in the industry who supported the company in developing its
products and marketing strategy
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Renault Technologies Romania - Titu Test Centre
Project Summary
Client
RTR
Signed in
2009
Country
Romania
Product
Portage equity
Sector
Automotive
Amount
EUR 44mn
Highlights
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Renault started operating in Romania in 1999 when it acquired 51% of Dacia SA when it was privatised.
Renault incorporated Renault Technologie Roumanie (RTR) in 2006 with the aim to develop the
engineering capabilites outside France
EBRD provided EUR 44 million portage equity finance for building Titu Test Centre, Renault’s largest
test centre outside France and one of the very few investments in automotive engineering in Central
and Eastern Europe or the former Soviet Union.
EBRD supported the projects as it promotes links with local universities and other academic institutions
and improves the technological level and quality of components produced by local suppliers through
closer contact and more rapid feedback
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Alro Slatina
Project Summary
Client
Alro
Signed in
2010
Country
Romania
Product
Syndicated Loan
Sector
Non-ferrous metals
Amount
USD 180mn
Highlights
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Listed on the Bucharest Stock Exchange, Alro is the largest aluminium smelter in southeast Europe and
one of Romania’s largest industrial companies, employing over 3,300 people. It is majority owned by
Vimetco NV, a vertically integrated producer of primary and processed aluminium products
Due to the global crisis, Alro’s existing debt structure affected the financial flexibility of the company,
putting a considerable strain on cash reserves. This had a negative effect on the ability of the company
to pursue its strategy of shifting towards higher value added products
EBRD provided a USD 180 million refinancing package (USD 105million syndicated) to Alro in order to
consolidate its financial structure, help the company move into higher value added products and
improve energy efficiency
EBRD’s investment will allow Alro to proceed with a USD 50 million investment program between 2010
to 2012, which focuses on improving the quality and range of its products and includes significant
energy efficiency improvements
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UAC Europe
Project Summary
Client
UAC Europe
Signed in
2012
Country
Romania
Product
Senior debt + Mezzanine
Sector
Aerospace
Amount
EUR 25mn
Highlights
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UAC Europe is the Romanian subsidiary of Montana Tech Components (“MTC”). UACE started the
production of aluminium alloy profiles for the aerospace industry in 2009 at its site in Dumbravita,
Maramures
MTC is a Swiss-Austrian industrial group founded in 2006 with operations in hi-tech niche
manufacturing through three main divisions: Aerospace and Industrial Components; Special machinery
for product identification in the metallurgical sector and Energy Storage – button cell batteries
The EBRD funding will be used to support the development of additional operations: machining, surface
treatment and assembly operations in Dumbravita and increasing UACE’s added value output
Upon completion of the EBRD investment in 2014, UACE will be able to supply aerospace
manufacturers like Airbus/EADS, Alenia or Boeing with locally produced components
The EBRD is boosting Romania’s presence in the global aerospace industry
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Green Group
Project Summary
Client
Green Group
Signed in
2011
Country
Romania
Product
Equity
Sector
Recycling
Amount
EUR 6.8mn
Highlights
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Green Group is the only waste recycling integrated park from Romania and was set up following the
acquisition of the majority stake by Global Finance’s South East Europe Fund (SEEF) in consortium
with EBRD from Romcarbon
Green Group consists of GreenTech SA (PET bottles recycling), GreenFiber Internațional SA (PET fiber
producer), GreenWEEE Internațional SA (WEEE recycling) și GreenLamp Reciclare SA (lamp and
baterries recycling)
The total investment value of EBRD and SEEF in Green Group reached EUR 22.7 million. The project
represents a major capital transaction in the recycling industry field and will sustain the Green Group’
strategy in becoming the most important waste recycling park from SE Europe
South East Europe Fund is a private equity fund managed by Global Finance, an independent
investment firm that pioneered private equity in the region. The EBRD is one of the anchor investors in
SEEF
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Danone
Project Summary
Client
Danone
Signed in
1995
Country
Russia, Bulgaria,
Romania, Poland
Product
Equity /
Multi-project facility
Sector
Dairy
Amount
USD 100m
Highlights
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Danone – global leader in fresh dairy and bottled water production
Long-term partnership in the region
US$100m multi-project facility for equity co-investments
The Multi-Project Facility (MPF) was expected to have a strong transition impact, as it would help with
the restructuring of the food industry in the areas of primary production and packaging as well as
marketing and distribution. It will also help to develop technological and management know-how
throughout the food industry as a result of continuous support from Danone and the training of local
personnel.
Sub-projects:
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investment in dairy companies in Bulgaria and Romania
construction of a dairy plant in Russia and acquisition of biscuit plants in Russia and Poland
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Cora
Project Summary
Client
Louis Delhaize / Cora
Signed in
2012
Country
Romania
Product
Term loan
Sector
Retail
Amount
EUR 210m
Highlights
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Louis Delhaize is one of the leading European retailers operating in France, Belgium, Luxembourg, the
UK, Romania and Hungary. The company operates the Cora hypermarkets in Romania.
The proceeds were used to finance expansion of Cora hypermarket chain in Romania, most of which
will be carried out in regional.
Total project cost of EUR 397 million
The expansion of the Cora hypermarket chain in Romania (mostly in regional cities) is expected to
generate strong linkages with local suppliers, thus providing the latter with new commercial
opportunities with a reliable counterparty. The Project will also showcase the successful implementation
of advanced sustainable energy solutions in retail building
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Expur
Project Summary
Client
Expur / Saipol
Signed in
2010 - 2011
Country
Romania
Product
Term loan and
revolving loan
Sector
Oilseed processing
Amount
EUR 110m
Highlights
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Expur S.A. engages in the procurement, crushing, and processing of sunflower seed and rapeseed for
the Romanian market and for export. The end products include edible sunflower oil, meal from
sunflower seed and rapeseed, and biodiesel.
The project includes expansion and upgrading of the plant and financing of working capital needs
The EBRD loans are expected to facilitate market expansion and competition by introducing new
products to the Romanian market to give customers greater choice for a better value compared to
imports. A demonstration effect will be achieved through the introduction of new technology and
production efficiencies, as well as and knowledge and skills transfer.
All loans were syndicated to commercial banks.
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How to contact EBRD Romania
Team:
Peter Stredder, Acting Country Director, Romania (until 31.12.12)
James Hyslop, Country Director, Romania (as from 1.1.13)
Anca Ionescu, Regional Senior Banker Romania, Bulgaria & Moldova
Ovidiu Morariu, Principal Banker, Industry Commerce and Agribusiness
Cristian Antoci, Associate Banker, Agribusiness
Dragos Iliescu, Associate Banker, Industry Commerce and Agribusiness
Matei Anghelescu, Senior Analyst, Industry, Commerce and Agribusiness
Contact:
West Side, Metropolis Center, Bd. Iancu de Hunedoara 56-60, Sector 1, Bucharest
Tel: +4021 202 7100
SurnameX(name’s initial)@ebrd.com except:
StreddeP@ebrd.com and AngheleM@ebrd.com
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