2010-12-30
Intrum Justitia, East Capital Explorer, East Capital Financials Fund and the European Bank for Reconstruction and Development form company for
investing in Russian non-performing retail loans
A new joint venture between the European Bank for Reconstruction and
Development (EBRD) and EEDF AG, a company jointly owned by East Capital
Explorer, East Capital Financials Fund and Intrum Justitia, was founded
on December 22nd, with the sole purpose to acquire non-performing
retail loans (“NPLs”) from Russian financial institutions. The overall
commitments from Intrum Justitia, East Capital Explorer and East
Capital Financials Fund remain unchanged. The investment capacity of
this joint venture for the coming three years, however, could be
increased.
EEDF AG, a joint venture between East Capital Explorer, East Capital
Financials Fund and Intrum Justitia was established in early 2010, for
the purpose of acquiring NPL portfolios in Russia. In October 2010, a
cooperation agreement was signed between EEDF AG and the EBRD,
culminating on 22 December 2010 with the founding of a new investment
company, owned by EBRD and EEDF AG. The new joint venture is aiming to
expand financial capabilities of EEDF AG and to make acquisitions of
bigger NPL portfolios possible.
The Russian non-performing loan market for un-secured debt, is
comprised of non-performing retail loans such as consumer loans, vendor
loans, credit card debts and car loans and has increased following the
recent financial crisis. Banks are increasingly outsourcing debt
collection of non-performing loans to local collection agencies or
selling their non-performing consumer loan portfolios in the market in
order to improve cash flow.
The project will contribute to improving balance sheets of
Russian banks with the sale and consequent reduction of NPLs held by
banks. Furthermore it will contribute to the development of an active
market for the pricing and transfer of NPLs on the Russian market and,
importantly, foster the development of a sound and ethical credit
management servicing industry in Russia by developing credit management
services that promote the best of international practices.
“The cooperation between Intrum Justitia, East Capital Explorer,
East Capital Financials Fund and the EBRD is a great initiative to
continue developing the Russian credit management market. Of course we
see this as an attractive investment opportunity in an interesting
market, but also we will be contributing to the development of healthy
credit and payment behavior in this country, an important strategic
objective for us,” says Lars Wollung, CEO and President of Intrum
Justitia.
The portfolios purchased by the investment company will be serviced by
the leading CMS companies in Russia that are dedicated to implementing
high ethical standard collection services on the Russian market.
For more information, please contact:
Lars Wollung, CEO and
President
Tel: +46 8 546 102 00
Gijsbert Wassink, Director Financial Services
Tel: +41 (0)417278662, g.wassink@ch.intrum.com (g.wassink@ch.intrum.com)
Annika Billberg, IR & Communications Director
Tel: + 46 702 67 97 91, a.billberg@intrum.com (a.billberg@intrum.com)
About EBRD
The European Bank of Reconstruction and Development (EBRD) was
established in 1991 and is the largest financial investor in a region
of operations, which stretches from central Europe and the Western
Balkans to central Asia. With the ability and willingness to bear risk
on behalf of its clients, EBRD help countries in the region to become
open, market economies. EBRD is owned by 61 countries, the European
Union and the European Investment Bank.
About East Capital Explorer
East Capital Explorer AB is a Swedish company, created with the
specific aim of bringing unique investment opportunities in Eastern
Europe to a broader investor base. The company invests mainly in East
Capital's private equity and semi-public equity funds that provide
exposure to companies not otherwise accessible via the local stock
exchanges in Eastern Europe. East Capital Explorer targets fast growing
sectors such as the power utilities, financial, retail and consumer
goods and real estate sectors. East Capital Explorer has appointed East
Capital to manage its investment activities. Since 9 November 2007,
East Capital Explorer is listed on NASDAQ OMX Stockholm, Mid Cap.
About the East Capital Financials Fund
East Capital Financials Fund is a private equity fund that aims to
benefit from the long-term macroeconomic development and the growing
financial sector in Eastern Europe and CIS. The Fund has completed a
number of transactions in Russia, Ukraine, Georgia and Kazakhstan, and
currently holds fourteen investments in the portfolio. Thirteen of the
portfolio companies are banks and one is a collection agency.
Intrum Justitia is Europe's leading Credit Management Services (CMS)
group and offers services designed to measurably improve clients' cash
flows and long-term profitability. Intrum Justitia was founded in 1923,
has around 3,100 employees in 22 countries and revenues of
approximately SEK 4.1 billion in 2009. Intrum Justitia AB is listed on
NASDAQ OMX Stockholm since 2002. For further information, please visit
www.intrum.com