KMV Expansion Equity

cancelled

Provision of EUR 40 million financing in the form of (i) EUR 10m preferred equity and (ii) EUR 30 million debt to Karlovarske mineralni vody, a. s.  ("the Company") and its subsidiaries. The project entails financing of the company's acquisition of PepsiCo bottlers in countries where the EBRD invests. The transition impact of the transaction will derive primarily from two transition qualities: (i) Competitive: Through this transaction, the Bank supports a leading regional mineral water producer in significantly expanding its footprint in the Bank's region. The contemplated acquisition will result in quantifiable synergies which will further increase the competitiveness of the combined operations; and (ii) Integrated: The project will entail regional FDI by supporting a Czech-based agribusiness company expanding in a region where intra-regional FDI has been limited so far. Karlovarske Mineralny Vody S.A., a joint stock company incorporated in the Czech Republic, with operations in the Slovak Republic, Hungary, Bulgaria and Austria. Karlovarske Mineralny Vody S.A is one of the leading mineral water producers in central and eastern Europe. EUR 10,000,000.00 Categorised B (2014 ESP). The production of mineral water is associated with limited environmental and social impact which can readily be assessed and addressed through appropriate mitigation measures. Environment and sustainability due diligence for this project has been undertaken in-house and focused on the corporate systems for managing environment and sustainability issues within KMV, their current regulatory compliance status and their ability to deliver the Project in line with EBRD requirements for all the current and acquired businesses of the group. The ESDD included a site visit and EHS audit of KMV's biggest facility in the Czech Republic. It has been confirmed that the company is in full compliance with EU environmental and safety legislation, has good environment and sustainability management systems and is generally in compliance with the EBRD's ESP. The major aspects associated with the Project are water resources and wastewater, hazardous materials, supply chain, labour and safety aspects management, which are limited and have local impacts. While the ESDD visit did not cover PepsiCo's facilities the information from open sources suggests that the company has developed and implemented a highly sophisticated system for management of key sustainability issues, an approach closely aligned to the Bank's Performance Requirements. In order to ensure the Company is in full compliance with the EBRD's Performance Requirements for newly acquired businesses an ESAP has been developed. The Company is required to provide annual environmental and social reporting on the implementation of the agreed ESAP. None. Marian Gramata marian.gramata@mattoni.cz +420 800 11 10 11 +420 800 11 10 11 www.kmv.cz Horova 3 360 21 Karlovy Vary