Toepfer Ukraine W C New Facility 2005

complete

The proceeds of the financing will be used by the borrower, Alfred C. Toepfer (Ukraine) Ltd, to originate (i.e. purchase directly from farmers), transport, store and then export the agricultural commodities, or sell them locally, or supply to the leading local food processors in Ukraine. The project will continue to inject liquidity directly into the primary agricultural sectors of grain and sunflower-seed farming, where Ukraine has a great natural advantage of probably the best natural growing conditions in the world. The farming sector in Ukraine is in an early stage of transition and the project will address two obstacles to transition of the sector, (i) the inefficiency of the primary markets for the origination of agricultural products, resulting in barter transactions, lack of transparency, high volatility and low prices for the farmers (ii) the lack of trust in a reliable grain warehousing system. The Project will help achieve the transition objectives as follows: 1. Expansion of competitive interactions and linkages to other sub-sectors, e.g. grain warehousing. Toepfer is strongly committed to the reform of the grain storage sector and to the introduction of the Warehouse Receipt legislation and practices. The visible participation of Toepfer will lead to an increase in the transparency in the grain origination market, reducing the proportion of barter transactions and helping to get better prices for the primary-agriculture producers, the farmers. 2. Syndication of this substantial transaction to foreign commercial banks will enhance the visibility and attractiveness of Ukraine to other Western financiers. 3. Institutional dialogue: In parallel with this project, the Bank has initiated an institutional policy dialogue and signed a Memorandum of Understanding with the Ukrainian authorities regarding creation of the legal framework for this system and related infrastructure. The project will help prepare the ground for introduction of a viable warehouse receipts system in Ukraine. The borrower, Alfred C. Toepfer (Ukraine) Ltd, is a fully owned subsidiary of Alfred C. Toepfer International Netherlands BV (the sponsor), a member of Toepfer group, and a leading company trading in agricultural commodities in Ukraine since 1993. Toepfer group, based in Hamburg, is one of the world’s leading agricultural commodities trading companies. The existing facility amount will be reduced from USD120 million to US$ 100 million with up to 62.5% syndicated to commercial banks. The final maturity of the facility will be extended to June 2008 (subject to annual renewal). US$ 230 million, inclusive of certain parallel loans from local banks and inter-company loans from the sponsor. C/0. By nature of its business, the client will not be directly involved in any kind of processing activities, therefore, environmental issues associated with the project are not considered to be significant. None. Bjorn Stendel, General Director of ACTI Ukraine 13 Reytarskaya 2nd floor, Kiev, Ukraine Tel.: +38 044 229 2155/2097/230 2682/2692