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Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
OOO SUNTY
Project ID
7469
Fiscal year
2010
Status
Active
Guarantee holder
Campestres Holdings Limited
Investor country
Cyprus
Host country
Russian Federation
Environmental category
B
Sector
Manufacturing
Date SPG disclosed
April 13, 2009
Project Board date
June 02, 2009
Gross exposure
 $30.2 million
Project type
Non-SIP
ESRS
ESRS for OOO SUNTY in Russian Federation

View Summary of Proposed Guarantee


MIGA has issued a guarantee of $30.2 million to Campestres Holdings Limited (TOHL) of Cyprus, covering its investment to acquire partial ownership of Russian packaged coffee and tea product manufacturer, OOO Sunty. The coverage is for a period of up to 20 years, against the risks of transfer restriction, expropriation, and war and civil disturbance. MIGA’s guarantee covers Campestres’ investments of equity, goodwill, future retained earnings, and dividend entitlement in OOO Sunty.

Campestres will be effecting its investment in OOO Sunty in conjunction with the European Bank for Reconstruction and Development (EBRD), and the two will invest an estimated $26.3 million in a combined 51 percent ownership in OOO Sunty, with the deal involving a working capital investment for OOO Sunty, transfer of trademark ownership in Commonwealth of Independent States and Europe, long-term lease agreements for production facilities and warehouses, and additional improvement measures for infrastructure and environmental protection.  A $3 million portion will be applied to the purchase of additional equipment and computer system enhancements to OOO Sunty’s operations.

Currently OOO Sunty – via its predecessor entity, “Grand Group Russia” – has estimated market shares of 6 percent and 5 percent, respectively, of the total Russian market for packaged coffee and tea products, by volume

Expected developmental impacts of the project include: increased competition in the Russian packaged coffee and tea product business segment, via introduction of global Tata Group coffee and tea brands improved production processes and product quality by applying Tata Group’s expertise in the areas of production efficiency and tea buying and tasting; and introduction of global Tata Group human resource best practices.

MIGA’s guarantee for this investment is consistent with the first pillar of the World Bank Group’s Country Partnership Strategy for Russia which focuses on sustaining rapid economic growth.

 
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