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Working with the European Bank Working with the European Bank for - - PowerPoint PPT Presentation

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Working with the European Bank Working with the European Bank for Reconstruction and Development Presentation to the Presentation to the European Broadcasters Union 29 October 2012 1 The European Bank for Reconstruction and Development The

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Working with the European Bank Working with the European Bank for Reconstruction and Development Presentation to the Presentation to the European Broadcasters Union

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29 October 2012

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The European Bank for Reconstruction and Development The European Bank for Reconstruction and Development (EBRD) at a glance

International Financial Institution

1

Established in 1991 and owned by 63 countries and the EU and EIB

(1)

Solid financial position

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AAA rating and a capital base of EUR 30bn Development mandate

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To foster transition towards open and democratic market economies and promote entrepreneurship Largest investor in the region

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In 2011 Annual Business Volume amounted to EUR9.1bn comprising 380 projects

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(1) 57% of shareholding is G7 and 84% is OECD country based. EU27 countries hold 62.8% of the shareholding.

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Th EBRD’ Obj i The EBRD’s Objectives

P t j t th t d d Promotes projects that expand and improve markets and help build institutions that underpin the market economy

Transition Impact

Supports, but does not replace, private investment. Provides

EBRD

financing at reasonable terms Project returns are commensurate with risks

Sound Banking Addition- ality

3

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SLIDE 4

EBRD operates across 33 countries, 40 regional offices EBRD operates across 33 countries, 40 regional offices and 3 continents

Central Asia and Mongolia Kazakhstan Kyrgyz Republic Mongolia Tajikistan Turkmenistan Eastern Europe and the Caucasus Armenia Turkmenistan Uzbekistan Azerbaijan Belarus Georgia Moldova Ukraine EBRD headquarters EBRD country of Central Europe and Baltics

Croatia Estonia Hungary Latvia Lith i

South-Eastern Europe

Albania Bosnia and Herzegovina Bulgaria FYR Macedonia

Southern and eastern Mediterranean

Egypt Jordan Morocco

Russia Turkey

4

  • peration

Lithuania Poland Slovak Republic Slovenia Romania Montenegro Serbia Tunisia

y

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SLIDE 5

h h b f i d i d ..throughout a number of industries and sectors

Agribusiness Natural Property and Manufacturing Resources Tourism and Services Power and Energy Financial Institutions Transport Municipal Infrastructure Climate Fi

Information and

Equity Funds

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Finance

Communication Technologies (ICT)

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SLIDE 6

EBRD id id fi i l i EBRD provides wide financing solutions

“Typical” investment profile

Typical Size Term/Holding period

 Debt instruments: typically from 7 to 10 years  Equity Investments and Guarantees: typically from 3 to 7 years  Ticket size from a low single digit EUR mn amount to over EUR 100 mn

Typical investment profile

period Instruments

 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

Investments approach/Limits

q y  EBRD typically acts as a co-investor along other sponsors  EBRD’s stake typically does not exceed 35% of the total investments (equity

Currency

 Local and major currencies (US$, EUR, RUB, etc.)

approach/Limits

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

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Exact financing terms are defined by specific project circumstances

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SLIDE 7

EBRD’s objectives achieved through financing the EBRD s objectives achieved through financing the private sector

80 12

€ billion

 Invested over

€75.2 billion in more than 3,468 projects

60 65 70 75 10 Net c BV)

3,468 projects since 1991

 As at end June

2012:

35 40 45 50 55 6 8 cumulative busi ness volume (AB

– €3.4 billion invested in 153 projects

15 20 25 30 35 2 4 ness volume Annual busi

p j – Private sector accounted for 79% share

5 10 2

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– Debt 84% & Equity 16%

Debt ABV Equity ABV Net Cumulative Business Volume

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SLIDE 8

Cooperation with EBRD offers companies numerous Cooperation with EBRD offers companies numerous advantages

1

  • EBRD aims to develop long term relationships

typical investment horizon is up

Long-term investor 1

  • 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
  • n the short term market fluctuations

St t d 2

  • Transactions are tailored to the needs of the clients and a variety of financial

Sector knowledge 3

  • Deep knowledge and sector expertise proven by more than 140 executed

Structured solutions

  • 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

Strong ties with 4

  • EBRD has established strong and long lasting connections with Local and

Sector knowledge & local expertise

  • Deep knowledge and sector expertise proven by more than 140 executed

projects in the ICT sector

Local & Federal Governments

g g g Federal Governments that allow the Bank to promote and defend interests of its portfolio companies

Preferred Creditor 5

  • EBRD has a Preferred Creditor Status, which exempts payments to EBRD

li d t i d f i h t l It ll EBRD t id

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Status

generalised moratoria and foreign exchange controls. It allows EBRD to provide financing even in the hardest market conditions

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Transparency, sound business principles and TI are the Transparency, sound business principles and TI are the key criteria for the projects financed by EBRD

Transparent Shareholding Structure

  • 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

1 Strong Business Fundamentals

  • Sound business model with a clear return to the Bank from the main operations

rather than from alternative sources

2 Audited Financial Statements

  • At least 3 years of financial statements audited by reputable international or local

auditing firms and prepared in accordance with IFRS

3 Transition Impact (TI)

  • Impact on the local economy in line with the Bank’s mandate to facilitate

transitioning to the market economy

4

9

( )

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P j Ti li Project Timeline

EBRD project cycle

Concept Review Final Structure Approval Project Structure Approval Board of Directors Approval Signing

1 2 3 4 5

 Contact initiated  Define concept  Initial company and project information  Due Diligence: Financial, Legal and Technical  Finalizing the deal terms  Drafting legal documentation (term sheet)  The Board makes a final review and approves the project  Funds are ready to be disbursed review  Mandate letter to initiate transaction

The whole process timing is dependent largely on the various specific circumstances and the availability of relevant information.

Mandate letter Signed Term sheet Signed Legal Documents Signed

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y

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ICT S ICT Sector

Cumulative Financing to date:

  • ca. €4bn

C t P tf li €1b

  • Mobile & fixed line
  • ISPs
  • Content production
  • B2B publishing
  • Cinema chains

Selected Subsectors Comments

Current Portfolio: €1bn

140 transactions from low single digit million to €200mn amount

  • Cable TV
  • Towers
  • Satellites
  • Data centres
  • Cinema chains
  • Outdoor advertising
  • IT services
  • Software developers
  • Systems integrators

amount

15 dedicated employees

  • Fibre
  • Wireless broadband
  • MVNO
  • Pay-TV

M bil

  • Systems integrators
  • Call centres
  • Internet
  • Cleantech
  • Semiconductors
  • Mobile payments

Investments into the ICT sector are viewed as a key tool in modernizing the local

  • Semiconductors
  • FDIs

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Investments into the ICT sector are viewed as a key tool in modernizing the local economy and increasing its innovation and competitiveness

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ICT S I ICT Sector Investments

 Eurovision  Eurovision  Russia Towers - equity investment to finance q y shared communication infrastructure for mobile and fixed wireless telecom operators in Russia  Emitel – financing an investment programme including (i) new digital terrestrial broadcasting including (i) new digital terrestrial broadcasting services, and (ii) expansion of telecoms tower services as an independent tower operator

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se ces as a depe de t to e ope ato

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ICT S I Fi i Di i i i ICT Sector Investments: Financing Digitisation

  • Broadcaster’s need digital infrastructure, including network and

g , g 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
  • 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

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industrial, commercial, etc.

  • Fees from distribution to cable channels for expatriate viewing
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EBRD Legal Transition Programme EBRD Legal Transition Programme

ICT sector support - overview

Focus on development of sector/optimising its impact across the Focus on development of sector/optimising its impact across the economy

  • Attraction of investment

I d i h i f i i

  • Introduction, enhancement or maintenance of competition
  • Balancing incentive to existing players to invest with access based competition

Helps with identification of investment bottlenecks

Helps with identification of investment bottlenecks

  • Absent or short-sighted policies
  • Absent or flawed laws
  • Absent or weak institutions
  • Absent or outdated methodologies

Ab t k it

  • Absent or weak capacity
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SLIDE 15

EBRD Legal Transition Programme EBRD Legal Transition Programme

ICT sector support - overview

W k ith t t d i li / l ti

  • Works with government to modernise policy/regulation

to encourage investment

  • Policy dialogue
  • Policy dialogue
  • Technical cooperation support
  • Outreach

Li k d l B k i j h

  • Linked to actual Bank investment projects, whenever

possible

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EBRD Legal Transition Programme

  • Activities

EBRD Legal Transition Programme

Examples of activities and locations Activities

  • Training and capacity building
  • ICT policy development

P i d d l d fti d d ti

  • 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
  • Infrastructure access and sharing
  • Countries: Albania, Armenia, Azerbaijan, Georgia, Jordan,

Kazakhstan Kyrgyzstan Moldova Mongolia Montenegro Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Montenegro, Serbia, Tajikistan, Ukraine

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Selected projects the ICT team executed in the past across Selected projects the ICT team executed in the past across all countries of operations (1/2)

Equity Investment

Euro 200 million

Poland Russia Equity Investment via Venture Capital Facility Regional Loan

Euro 43 million

Turkey Loan

Euro 100 million

Russia Convertible Loan

USD 30 million

Romania Loan

Euro 15 million

Russia Poland Russia Russia 2011 2012 2012 2012 2012 Russia 2012 Croatia 2009 Syndicated Loan

Euro 258 million

Equity Investment 2011

Euro 10 million

2010 Convertible Loan

USD 20 million

2011 Investment in Bond Offering 2009 Equity Investment

USD 11 million

Croatia Convertible Loan 2010

Euro 4 million

Poland Privatization – Equity Investment

Euro 49 million

Albania Privatization - Syndicated Loan

Euro 27 million Euro 20 million

Regional Equity Investment Poland & Balkans Loan and Equity Investment

Euro 22 million

Russia Equity Investment

Euro 30 million

Regional Fund Investment

USD 30 million

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2008 2008 2008 2009 2011 2009

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Selected projects the ICT team executed in the past across Selected projects the ICT team executed in the past across all countries of operations (2/2)

Ukraine Equity Investment

Euro 22.3 million

Syndicated Loan

EUR 50 million

Regional Kazakhstan Syndicated Loan

Euro 130 million USD 35 million

Russia

Euro 3 million

Bulgaria Equity Investment Georgia & Bulgaria Loan and Equity Investment

USD 35 million

Loan and Equity Investment 2007 2006 Russia Bulgaria Serbia Kazakhstan Albania Poland 2005-2007 2007-2008 2006 2008

USD 72 million

2003-2005 Syndicated Loan Privatisation – Loan and Equity Investment

Euro 93 million

2004

Euro 17 million

2004 Loan and Equity Investment 2003 Syndicated Loan

USD 110 million

Syndicated Loan

Euro 100 million

2003 2003 Loan

Euro 52.5 million Euro 75 million

Poland Loan Czech Republic Syndicated Loan

USD 35 million Euro 32 million

Regional Equity Investment

Euro 151 million

Romania Loan

Euro 81 million

Regional Loan

Euro 65 million

Regional Equity Investment

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2001 2002 1999 1997 - 2002 1998 1998

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The European Bank for Reconstruction and Development The European Bank for Reconstruction and Development contact

Investment Opportunities contact: Director Legal Transition programme contact: Paul Moffatt ICT Team Industry, Commerce & Agribusiness 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

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(

EC2A 2JN