BITE Group (f.Project Bella) Equity Investment

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Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed The Bank made two investments in Bite in 2007 and 2009.  The EBRD approved the first commitment of up to EUR 10 million in Bite Co-Investment LP to allow the Company to develop its mobile telephony business in Lithuania and Latvia.  Details of a subsequent equity investment of EUR 2.5 million to de-leverage the Company and thereby protect the initial equity investment are set out here. Project Objectives The EUR 2.5 million capital call planned at the time of approval of the transaction permitted the Company to improve the Company’s competitive position by decreasing its financial leverage, and position itself to capture upside on new equity investment by purchasing and cancelling its own discounted senior subordinated notes. Transition Impact Supporting the Company’s capital position achieved an increase in the Company’s market share in the years following the transaction.  Further, in addition to demonstrating the use of a leveraged buy-out (LBO) model in Latvia, the transaction resulted in the introduction of new products (both 3G and Blackberry service) in Latvia and Lithuania. Additionality EBRD’s participation played an important role at the time of the transaction, both by providing comfort for the successful closing of the largest LBO transaction in the region and helping the Company to weather the difficult environment by injecting additional equity in 2009.  In addition, the transaction was complex, involving a Company that was not yet EBITDA positive, reducing investor appetite to participate. Environmental and Social Summary This project was classified as Environmental Category B, and found to be unlikely to be associated with significant environmental or social issues.  The Company was required to ensure that the project met applicable national and EU standards on issues relating to environment, health and safety and labour.  Further, the Bank continued to monitor the client’s environmental and social performance using annual reporting. Technical Cooperation n/a - none Implementation Summary The largest LBO in the Baltics at that time, the transaction was a successful demonstration of the product in this region. In February 2016, the Company was sold to Providence Equity Partners, a premier global Private Equity and credit investment firm, further supporting the Company’s strategy of regional consolidation in the mobile and fixed telecommunications sector.