Country: Russia
Project number: 37896
Business sector: General manufacturing
Public/Private: Private
Environmental category: B
Board date: 18 September 2007
Status: Passed concept review, Pending final review
Project description and objectives: The proposed project entails the purchase of 100% of shares in an existing Russian company, ZMZ-Bearings Ltd (the “Company”), operating near the city of Nizhny Novgorod. The purchase agreement was signed on 01 august 2007. The share acquisition will be financed by Daido Metal Co., Ltd, the “Sponsor” (for two-thirds) and by EBRD (for one-third). The Company’s operations will be modernised and its sales network will be expanded both locally and abroad.
Transition impact: The proposed project assists the entry of a high quality auto parts supplier into Russia. The project will promote technology and skills transfer from the Sponsor to the Company, as well as improvement in operational efficiency and product quality. The success of the project may encourage other international automotive suppliers to enter Russia and assist in the restructuring of local companies in the automotive supply sector, thereby increasing local competition and aiding in the development of a market economy in Russia.
The client: ZMZ-Bearings manufactures automobile engine components, such as half-shell bearings, bushes and washers. It is the leading Russian company in the manufacture of such products locally. The Company will be owned and managed by the Japanese Sponsor, a leading manufacturer of plain bearing products with operations in twelve countries worldwide.
EBRD finance: EBRD will provide up to RUB 130 million (approx. USD 5 million equivalent) in equity financing.
Total project cost: Approx. USD 20 million equivalent to be funded by a combination of debt and equity.
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