product for support to joint ventures ... - old.ibec.intold.ibec.int/files/sp_off_eng3.pdf ·...

1

PRODUCT FOR SUPPORT TO JOINT VENTURES, JOINT PROJECTS AND CONTRACT MANUFACTURING IN THE IBEC’S MEMBER COUNTRIES

“INTERACTION SYNERGY: CREATE, INVEST, DEVELOP”

2

THE IBEC’S KEY AND STRATEGIC PURPOSES, PRIORITIES KEY PURPOSES OF THE BANK UNDER THE IBEC’S AGREEMENT CONCERNING THE ORGANIZATION AND ACTIVITIES To promote the development of foreign economic links between the

Bank’s member countries, their banks, enterprises and organizations, and between them and banks, enterprises and organizations of other countries

To facilitate the creation and operation of joint ventures, primarily those involving companies of the Bank’s member countries

To participate in the development of market economic relations among business entities in the Bank’s member countries and other countries

BANK’S PRIORITIES FOR 2016-2020 Financial assistance to joint ventures of the IBEC’s member countries Financing of projects implemented by enterprises and organizations of

several Bank’s member countries (joint projects of the Bank’s member countries);

Projects implemented by small and medium enterprises of the Bank’s member countries

STRATEGIC PURPOSES OF THE BANK FOR 2016-2020 To promote the strengthening and development of foreign economic and

trade links between enterprises and organizations of the Bank’s member countries, and between them and enterprises and organizations of other countries

To promote the creation and development of: – joint ventures of the Bank’s member countries; – small and medium enterprises of the Bank’s member countries; – organizations and enterprises of the Bank’s member countries,

which implement joint projects.


3

TARGET PRODUCT SEGMENT

joint ventures established or operating in one of the IBEC’s member countries as foreign-owned organizations involving investments of other IBEC’s member country, including small and medium enterprises, which are established in accordance with the laws of the country where they are located, as well as innovative business

joint projects, the key participants of which are enterprises and/or organizations from the IBEC’s member countries, with priority given to the projects implemented as a part of government programs

contract manufacturing1

1 Contract manufacturing means output of products on a by-order basis at the facilities of the independent manufacturer located in one IBEC’s member country, which ensures full compliance with a technological cycle and quality control of the finished products pursuant to the requirements of the customer located in another IBEC’s member country.


4

BASIC CONDITIONS Priority industries of the IBEC’s member countries Bulgaria: tourism, agriculture, infrastructure2, manufacturing3, machine

building

Vietnam: medicine, tourism, manufacturing, transport infrastructure, machine building

Mongolia: transport infrastructure, agroindustrial complex, health care

Poland: agriculture, processing industry, tourism, manufacturing

Russia: manufacturing, agriculture, health care, infrastructure, power industry

Romania: agriculture, pharmaceutics, tourism, manufacturing, infrastructure, power industry, health care

Slovakia: power industry, machine building, health care, innovative technologies, transport infrastructure, shared service center, agriculture, pharmaceutics

Czechia: tourism, power industry, machine building, production infrastructure, pharmaceutics, food industry

2 Infrastructure means a totality of enterprises, institutions, management systems, communications systems, etc., which provides the activities of the community or any of their area.

3 Manufacturing means an industry, a sector of national economy, which represents a totality of enterprises (factories, mills, ore mines, pits, power stations), engaged in production of tools of trade, as well as extraction of raw materials, supplies, fuel, power generation, timber harvesting and further processing of products received in production or produced in agriculture.


5

FINANCIAL SUPPORT OBJECTIVES Financial support: to foreign economic activities of joint ventures (JV); to implementation by enterprises of the Bank’s member countries of joint projects in the territory of the IBEC’s

member country or those contributing to development of economies of the Bank’s member countries; related to capital investments of JV, including those aimed at creating and/or acquiring ownership by JV of fixed

assets (real estate, equipment), carrying out construction and installation, repair, design, engineering works, technical upgrading of enterprises, start-up of new or modernization (reconstruction, innovation) of operating productions;

to current activity of joint ventures, including purchase of raw materials and supplies, effecting of current payments relating to long-term lease, other costs not involving capital investments.

Types and forms of financial support: Loan products picked up with account to specifics of each particular joint venture and implemented projects:

project finance4/investment loans; financing for development of current activity of JV, including for working capital replenishment.

Bilateral direct lending: loans; non-revolving lines of credit; overdrafts on JV accounts.

Trade finance: opening of letters of credit or confirmation of letters of credit issued by counterparty banks (including standby letters of credit); provision by the Bank of a loan or deferral of payment/ payment by installments within a transaction on a letter of credit; issue of guarantees or counter-guarantees: bid bonds, performance bonds, advance repayment bonds, payment guarantees, assurance of service (maintenance

services), including as security for obligations on credit risk products; issue of sureties by the Bank; structured finance (finance against insurance or guarantee coverage by export credit agency (ECA)); bilateral or syndicated lending to banks, which service a JV, for the purpose of providing by banks financial support to foreign economic activities of JV or

participants of joint projects. Syndicated lending in favor of JV and participants of joint projects; Documentary transactions (guarantee transactions beyond trade finance, secured letters of credit, collection) in settlements of JV and participants of

joint projects. 4 Project finance means financing of investment projects (investment programs) with a view to creating solid assets (tangible or intangible) for which the source of debt servicing is cash flows generated by funded projects only.


6

FINANCIAL SUPPORT CONDITIONS

Currency of financing: Euro; Russian Ruble; other currencies of the IBEC’s member countries (to be considered on a case-by-case basis); US Dollars.

Limit of financing: up to EUR 20 mln. (inclusive) or an equivalent in other currency of financing Financing period:

short-term (up to and including 1 year); long-term (up to and including 7 years).

Interest rate/other financial conditions: to be set individually for each particular lending transaction. Fees may be charged in accordance with the Bank’s tariff or as set individually.

Grace period for payment of interest/principal debt: individually for each particular lending transaction. Interest payment frequency:

Quarterly, starting from the quarter, in which financial support was provided; Monthly, starting from the month, in which financial support was provided, for lending transactions up to and including 1 year.

Requirements to the borrower, other obligor of the Bank: Legal entity located in the territory of one of the IBEC’s member country, which:

does not carry out activities that are not supported by the Bank5; whose activities meet the Bank’s compliance control principles; has reliable business reputation, creditworthiness and stable financial position; does not have overdue liabilities; does not undergo bankruptcy, liquidation or reorganization procedure (other than reorganization in the form of transformation); has no negative credit history at the Bank and in the country of its location; does not have negative net assets (not applicable to SPV); does not have debt to budget in respect of payment of taxes and charges.

When carrying out project finance, the company’s participation in financing from own resources6 amounting not less than 20% is required. The amount of a lending transaction shall not exceed 50% of the company’s balance sheet total for the last reporting quarter of the current calendar year.


5 Activities related to establishment and maintenance of gambling venues, which bear the signs of money laundering and financing of terrorism; prohibited by international legal regulations irrespective of involvement of the Bank’s member countries therein; related to production and trade of tobacco goods, strong alcoholic beverages, narcotic drugs, and psychotropic substances, as well as production and sale of arms, or intermediary activities thereupon; activities of political organizations and movements; related to charity or other unregulated non-profit activities. 6No financing from own resources is required, if the collateral in the loan transaction is a sovereign guarantee issued by the country of JV registration, or a guarantee of a 100% government bank of the country of JV registration.

7

SETTLEMENT AND CASH SERVICES Organization of integrated settlement and cash services using on-line remote banking, involving the opening by the

Bank of accounts for JV and JV affiliated enterprises and their principal counterparties, ensuring settlements among them within the Bank during an hour with no additional fees charged by the Bank;

Effecting of cross-border payments in major world currencies, including in currencies of the Bank’s member countries; Exchange transactions for JV at the preferential exchange rate; Opening of fixed-term deposits for JV in currencies of the Bank’s member countries; Cancellation of a fee for maintenance of JV accounts opened with the Bank and for opening and maintenance of

additional JV accounts after accounts were opened with the Bank by the second affiliated enterprise of JV or by the second counterparty of JV.

Monthly accrual of interest on the balance of accounts of JV, as well as its affiliated enterprises and their counterparties at the exchange rates set by the Bank.

COLLATERAL Liquidity collateral with pledge value not less than the requested amount of the loan product and 6-month interest thereon is a must. The preferred type of the collateral is a guarantee: a sovereign guarantee, or a guarantee of the bank with the state participation of at least 50% of its authorized

capital, or a guarantee of an international development bank (IDB), or a guarantee of the bank, with IDB as one of the shareholders (participants) provided that an IBEC’s member country is a shareholder (participant) of such IDB.

The following types of the collateral are also considered: guarantees and suretyships of governmental and local authorities; guarantees and suretyships issued by the banks other than those specified above; guarantees and suretyships of other enterprises and organizations; pledge of movable and immovable property; pledge of property rights; pledge of rights of claim, including under bank deposits; pledge of securities.

Requirements of the Bank to the property subject to pledge. availability of documented unassailable title of the pledgor to the pledged property and availability of the pledgor’s necessary licenses and/or permits; availability of an independent expert valuation of the collateral and its liquidity; insurance of the property for the duration of the loan obligation plus 30 calendar days in the insurance company that meets the selection criteria established by the Bank; conditions of storage and/or operation of the property shall ensure its preservation until the obligor fulfills its obligations to the Bank in full; The Bank shall be in a position to exercise control over preservation of the property until the obligor fulfills its obligations to the Bank in full.

The collateral shall not be encumbered by obligations of JV to other persons.


8

ADDITIONAL SERVICES Assignment of a personal client manager for operating decision on all issues with the Bank.

Participation of the Bank in search for partners and counterparties for establishment and implementation of JV current activity.

Assistance of the Bank in organization of JV registration procedure.

Participation of the Bank in the development of the conditions of foreign trade contracts with no additional charge levied when JV makes all settlements under contracts on the accounts opened with the Bank.

Informing by the Bank all clients with respect to products, works, services of JV, as well as invitation of JV for participation in the events organized by the Bank.

Provision by the Bank of information and consultancy support in terms of foreign currency control (in accordance with the Russian laws), as well as in selection of counterparties to resolve the issues of patenting, certification, customs and logistic convoy, participation in tendering procedures.

Provision of assistance by the Bank in selection of independent appraisal companies, independent surveyors, insurance companies, leasing companies, companies dealing with technical audit.

Participation of the Bank in preparation of business plans under the implemented projects.

Organization of negotiations with partners in the IBEC’s country of residence, including with the participation of the Bank’s representatives.

Provision by the Bank of deferral of payment in payment by JV of services of legal advisers, independent appraisal companies, independent surveyors, insurance companies, companies preparing business plan, companies dealing with technical audit, as part of loan projects implemented with the participation of the Bank or their partial payment by the Bank.

Possible leasing out of the Bank’s premises for placement of JV offices.


product for support to joint ventures ... - old.ibec.intold.ibec.int/files/sp_off_eng3.pdf ·...

Documents