LONDON (Oct. 12, 2004) — Nokian Tyres P.L.C. has negotiated a nine-year, $62 million loan with the European Bank for Reconstruction and Development (EBRD) and a syndicate of international banks to help it finance the construction of its plant near St. Petersburg, Russia.
Nokian earlier had disclosed a budget of $63.5 million for the factory in Vsevolozhsk, Russia, which it expects will be producing tires by next year. The 226,000-sq.-ft. plant should produce 1.5 million passenger tires in its first full year of production and grow steadily to 4 million units annually. Capacity will be expanded gradually, reaching 8 million units by 2016, Nokian said.
The plant will make Nokian-branded passenger car tires, which will be sold primarily in the growing Russian market. In the initial phase, the facility will employ about 200, most of whom will be Russian.
Four commercial banks are participating in the syndicate, taking $7.75 million each under an EBRD A/B-loan structure where EBRD remains the lender of record. The banks are Danske Bank A/S and HSH Nordbank A.G. of Denmark; Raiffeisen Zentralbank Ã–sterreich A.G. of Austria; and the Helsinki, Finland, branch of Calyon Bank, which is part of France's Credit Agricole Group.
The EBRD, established in 1991 when communism was crumbling in central and eastern Europe and ex-Soviet countries needed support to nurture a new private sector, uses investment tools to help build market economies and democracies in 27 countries from central Europe to central Asia.