IFC may loan Orient Express Bank $35 mln
MOSCOW. Aug 14 (Interfax) - The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, may provide a five-year $35 million loan to Russia's Orient Express Bank, the IFC said in a press release.
The loan will be the first tranche within a project to raise $90 million.
The second tranche - a one-year loan of around $40 million is to be raised in the form of a syndicated loan from other financial institutions. The IFC will organize that loan.
Orient Express Bank is also looking at raising another parallel tranche of $15 million, which the IFC will also organize.
The precise volume of the second and additional tranches may change depending on the market situation, the release said.
The IFC board will consider participation in the project on September 12.
Without IFC participation in the project the bank would not be able to raise five-year funding in the amount of the first tranche, raised from the Corporation, the release says.
A bank without enough experience on the international debt market would find it almost impossible to raise a syndicated loan in the second half of 2012 considering the situation on the market. So far Orient Express Bank has raised only one syndicated loan - in 2007, the IFC said.
The project will enable Orient Express Bank, which has been primarily funded by customer funds, to diversify its funding sources.
The project will also help the bank establish relations with a wide range of international financial institutions. Establishing a history on the international debt market will lead to increased investor interest in the bank during the IPO that is planned in the next three to five years, the release adds.
IFC is a shareholder of Orient Express Bank, with 13.86% of shares.
Other shareholders are the investment fund Baring Vostok Private Equity Fund IV (owns 30% of the bank through Cyprus-based Evison Holdings Ltd), former MDM Bank co-owner Igor Kim directly owns 7.14% and has another 8.54% through Dutch company Antof N.V., Kim's partners and Orient Express board members Andrei Bekarev and Alexander Taranov own 8.22% and 7.29%, respectively and the bank's chairman, Sergei Vlasov has 12.36%. In addition, one of the bank's minority shareholders is Gennady Kozovoi, the head of Raspadskaya with 2.22%.
Orient Express Bank was ranked number 32 by asset value in the Interfax-100 review of Russia's banks in the first half of 2012.