International Finance Corporation (IFC) and Varde Partners to invest up to EUR450 million in the purchase of troubled loans in Central and Eastern Europe, including Russia and Ukraine.
IFC and Varde Partners plan to show non-performing assets from banks" balance sheets that will allow credit institutions to continue to grant1000new loans. The share of IFC in the project will amount to EUR100 million
In early December last year, head of IFC"s Financial Markets in Central and Eastern Europe by Timothy Krause reported that the corporation in early 2010 plans to sign an agreement with the two Western management companies specializing in the purchase of bad assets of banks. Even then, IFC has considered the opportunity to begin repayment of bad assets from banks in CEE in 2010, totaling approximately EUR100 million with a corporation that was not going to buy distressed debt from banks, and had planned only to finance the deal for their redemption in professional companies.
In early January, IFC, European Bank for Reconstruction and Development (EBRD) and the company CRG Capital created its first fund to repurchase troubled assets of companies in Central and Eastern Europe and invested in him EUR36 million, planning to further increase capital stock up to EUR200 million It is assumed that the fund will invest in companies affected by the crisis. If the partnership with the EBRD, the enterprise should have an audit, the audit confirmed one of the "big four", the CRG Capital of such claims will not be displayed. Quotas investment in Ukraine has not yet determined, but they do not exceed 15% of fund assets (EUR30 million).
"In the focus will be medium-sized companies with annual sales of about EUR25 million in so-called" special situations ". For example, the company has accumulated many debts and has an operating loss, suffers from a shortage of working capital, and lenders are no longer willing to help. In However, the basis of a healthy business and can be restored. The first fund will be to restructure its debt, "- said director of IFC"s Financial Markets Kenro Dauers. According to him, the fund is open for investment in all sectors, except for strictly controlled by the state.
According to experts, it can be machine building, chemical and food industries. "The biggest demand is for a company whose business is significantly correlated with the overall economic situation in the country. This will ensure recovery of demand for their products after the GDP growth. This, in particular, oil and gas, power generation and retail," - says the analyst Astrum Investment Management Jaroslav Stetsik .
IFC"s second partner - Company Varde - is a leader in investments in troubled securities and assets, as well as in various discounted liabilities, including the unemployed and troubled corporate, retail and mortgage loans.
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