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Lomisi Operation

Georgia | Consumer Staples

Identification Code:: OP/06/0592
Total Operation Cost:: — USD
Maturity:: 84 months
Operation Status:: BSTDB Approved Amount – Approval Date

5.000.000 USD – 01 Dec 2006
: BSTDB Signed Amount – Signed Date

5.000.000 USD – 03 May 2007
: Status:
Completed
Description and Purpose of the Operation:: BSTDB provided a long-term investment loan to Lomisi, a fast-growing Georgian beer manufacturer, to: (i) finance the investment programme of the Borrower and, (ii) provide working capital required by Company's growth. The financing from BSTDB will support the continuation of the impressive growth of the Company in the fast-growing Georgian beer market, allowing the Borrower to continue taking advantage of the market opportunities.
Countries of Operation:: Georgia (100,00%)
Financial Product:: Loans
Sector:: Consumer Staples
Domain:: Private
Borrower/Client:: JSC Lomisi is a joint stock company established in Tbilisi, Georgia. The Company is the second largest beer producer in Georgia. In September 2005 JSC Lomisi has completed and launched into operation a new brewery, which allowed the Company to expand its sales and gain a market share of approximately 36% in August 2006, from 15% in 2003. The shareholders of the Company are three Georgian individuals and EBRD. EBRD has 25.03% of the Company's shares and is represented at the Board of Directors of Lomisi.
Co-Financers/Participants:: EBRD and TBC Bank - joint loan of USD 7 million EBRD equity investment of USD 3 million
Guarantors/Sponsors:: —
Developmental and Regional Cooperation Impact:: The Operation is consistent with the Bank’s Country Strategy for Georgia. The Strategy emphasizes financing of commercially viable private companies involved in such sectors as food processing, light industry manufacturing, etc. The Bank’s financing will: (1) Support the development of a private company in Georgia; (2) Facilitate the transfer of modern technology and know-how to the food processing industry of the country; (3) Result in improvements of quality and competitiveness of locally produced beer; (4) Stimulate competition in the local beer market; (5) The Operation is expected to have demonstration effect and assist in attracting foreign investments to Georgia; (6) Expansion of operations of Lomisi will produce positive impact on related sectors of the economy such as consumer goods distribution, transport, advertising, etc.
Environmental Classification and Impact:: The Operation has been screened as B1, meaning that an Environmental Assessment is required due to the potential Environmental, Health & Safety impacts (EH&S), as well as an Environmental Audit (EA), which was deemed necessary due to the potential non-compliance issues, past contamination, and present pollution. As reported, overall the Company’s factories comply with domestic EH&S legislation, and partially with EU legislation. As part of the audit report, the consultant prepared an Environmental Action Plan (EAP), which upon implementation shall bring the Borrower's activities at both plants in full compliance with the existing legislation, as well as substantially improve its EH&S performance. The Loan Agreement requires the Borrower to: 1) Remain compliant at all times with applicable Armenian EH&S rules and regulations; and 2) Report on annual basis on overall EH&S performance.
Operation Leader:: General Industries, Transport, Tourism 1, General Industries, Transport, Tourism 2
E-mail:: gitt1@bstdb.org,gitt2@bstdb.org