Kronostar III

completed

Krono Holding (the sponsor) through its Russian subsidiary, Kronostar, has implemented one of the largest downstream investments in the Russian forest sector of the past couple of decades. This Euro 350 million composite panel facility was implemented in phases starting in 2003. Earlier phases of the project were funded in part by IFC.The project currently under consideration involves - the financing of a project cost overrun, caused in part by an expanded environmental protection scope (over and above the original requirements) of project phases I and II, and ii) the financing of production capacity expansion. Total project cost is estimated at Euro 120 million of which Euro 100 million represents overruns and expanded scope of the project which has already been financed with a combination of equity, subordinated loans from the Sponsor and short term debt from Russian banks. A resin plant may be constructed at some time in the future, though that is not included within the cost of the currently considered project.