37071 - DARP Romania

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Summary of Investment Information

Project Number

37071

Company Name

Tonescu Finance S.A.R.L.

Date SPI Disclosed

Jul 7, 2015

Country

Romania

Region

Europe

Projected Board Date

Aug 6, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Apr 16, 2026

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Dec 11, 2015
Signed : Dec 21, 2015
Invested : Jun 6, 2016

Sector

Distressed Assets SPV

Project Description

The existence of a strong Distress Assets (“DA”) market constitutes an important element contributing to the appropriate performance of the financial industry in any economy. In this context, the proposed project is part of IFC’s program to promote the development of a DA market in Romania. To achieve this, IFC would be partnering with APS Holding SE (the “Company”), directly or indirectly through one or more of its affiliates, to acquire and service non-performing loans (NPLs) on Romania market.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	164.33
Equity	1.57

Development Impact

- Economic Development: The successful implementation of the project will improve the secondary market for distressed assets in Romania and could catalyse interest of other investors.
- Business Environment: As banks in the region increase the sale of their distressed assets to independent private investors, the transparency of those institutions'' balance sheets should improve as these assets would be priced according to market conditions.
- Financial Infrastructure: IFC''s involvement in this project would allow the ability of financial intermediaries in the country to offload their assets, particularly non-performing ones, improve liquidity and permit banks to devote resources to originating new transactions.

- Market Support: The vast number of opportunities for DA investments in the United States and Western Europe is crowding out other regions, including CES. Through this project, IFC supports the development of NPL markets by mobilizing international players for investments in Romania.
- Knowledge Transfer: The transaction will transfer best practices for NPL collection and resolution, corporate governance and environmental and social management. This is important in CES markets, many of which are experiencing their first financial crisis of significance following the break-up of the former Soviet Union and their first experience with large NPL sales.
- Liquidity: The Project will provide liquidity for DA investments, important as liquidity and leverage is extremely scarce for such investments. IFC would play an important role in supporting reputable investors. IFC''s participation in the Project should encourage other private sector players to consider NPL investments in the region.
- Local Knowledge: IFC is active in the Balkans and has relationships with local banks as well as regulators. IFC supports the project through its local contacts (e.g. for deal sourcing) and knowledge of local policies and procedures.
- Transparency: IFC''s presence should provide comfort as to the transparency of asset pricing in markets where regulators are sensitive to distressed asset sales prices.

E&S Category Rationale / Risks and Mitigation

This project involves (i) establishing SPVs to purchase and service portfolios of non-performing assets. The portfolios consist of large corporate, and SME NPLs and commercial real estate. Large corporate and SME NPLs cover a wide range of industrial sectors from construction and manufacturers of consumer and industrial goods. The project has been provisionally classified as a Category FI-2 according to IFC’s Environmental and Social Review Procedure.

Key E&S risks and impacts may include corporate debtors’ operations not being compliant with relevant local EHS and labor laws, delayed payments to suppliers and workers, environmental liabilities of the properties and forced evictions from the foreclosed properties. The challenge is that there may not be opportunities to work with debtors on E&S improvements when some assets are resolved quickly or resolved through legal systems.

Contacts

For Inquiries About the Project, Contact

Martin Machon
Celetná 988/38
110 00 Prague 1
Czech Republic
mailto:mailto:holding@aps-holding.com
phone +420 225 375 500
fax +420 225 375 515

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Title & Description	Anticipated Completion Date
Nominate officers	12/28/2015
Establish SEMS	12/28/2015
Staff Training	12/28/2015

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