Lots of financing options, yet modest results

How to successfully develop and finance more quality projects in emerging markets?  (Part 1)

Problem:

Last week, at a financing round-table organized by the US-Ukraine Business Council (USUBC) – representatives from the IFC, EBRD, OPIC and US EXIM bank reaffirmed their commitment to financing projects and trade with Ukraine.  They also demonstrated a whole host of very effective financing and insurance tools, available for use in Ukraine and other emerging markets.

At the same event, these esteemed organizations mentioned multiple success stories and yet each only named half a dozen, or so, of the largest Ukrainian companies (a few were the same names repeated by several institutions).  They also addressed fairly effective wholesale funding arrangements with local banks to serve local small and midsize businesses (SMEs).

Yet, each of representatives has acknowledged a serious problem, which acutely manifests itself in Ukraine and in other emerging markets: lack of strong bankable projects in the $10-75 mil. range, a segment widely considered the main economic driver and job generator in emerging market countries such as Ukraine.Fi3E Badge

Also noted were lack well-developed and bankable public sector projects in segments such as healthcare.

Thus given widespread availability of interested project sponsors, along with multiple public financing tools and risk mitigation products, what can be done to bridge the gap and convert more deal concepts into real deals with realistic financing and true economic impact?

Solution:

It is all about proper packaging.   Although the institutions are willing and able to lend,  they each have very specific goals and requirements.  Yet, the project sponsors/borrowers, oftentimes are not able to conform to those requirements, despite the fact that their financials and business plans are often sound.   (To Be Continued)

Financing projects in Ukraine – USUBC round-table announcement

INVITE:  “FINANCING FOR BUSINESS” – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUND-TABLE IMG-1cae7e700ec217303b52f13cd14e1c96-V

               Tuesday, March 12, 2019, 3 p.m to 5 p.m. Law Offices of McCarter & English,   
1301 K St., NW, Suite 1000 West Tower, Washington DC 20005

INVITATION: The U.S.-Ukraine Business Council (USUBC), www.USUBC.org, invites you to attend a “FINANCING FOR BUSINESS – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUND-TABLE, on Tuesday, March 12, 2019, from 3 p.m. to 5 p.m., with a light reception, in the offices of USUBC member, McCarter & English, 1301 K St., NW, Suite 1000 West (10th Floor), Washington, DC 20005.  The following panel of experts will make presentations followed by a discussion/Q&A session.

PROGRAM: PANELISTS FOR THE ‘FINANCING FOR BUSINESS’ ROUND-TABLE INCLUDE:

(1)  Douglas Frye, Senior Business Development and Loan Officer, Global Infrastructure, Export-Import Bank of the United States (EXIM)
          (2)  Alexander Gordin, Managing Director, Broad Street Capital Group, merchant bankers, specialist in US EXIM & OPIC type project transactions
(3)  Bruce Drossman, Senior Vice President, Global ECA Advisory and Execution, General Electric, GE Energy Financial Services/Global Capital Advisory (with US EXIM for four years)
(4)  Michelle Small, Head of North American Representative Office, European Bank for Reconstruction and Development (EBRD)
          (5)  Kenneth Angell, Managing Director, Project Finance & Tara Blake, Director, International Project Finance, Overseas Private Investment Corporation (OPIC) 
          (6)  John Strayhorn, President, Global Insurance Services, EXIM approved insurance broker
(7)  Morgan Williams, President, U.S.-Ukraine Business Council (USUBC), Moderator

RSVP:  Registration is required for attendance at the USUBC Financing for Business Roundtable. Please register by sending an e-mail to mwilliams@usubc.org. There is no charge for the meeting. Photo ID is required. USUBC thanks McCarter & English law firm, a new member of USUBC, for hosting the USUBC Business Luncheon in Washington.

“FINANCING FOR BUSINESS” – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUNDTABLE
Featured Image -- 4182Tuesday, March 12, 2019, 3 p.m to 5 p.m. Law Offices of McCarter & English,
1301 K St., NW, Suite 1000 West Tower, Washington DC 20005. followed by a light reception

U.S. EXIM BANK reopens for transactions with Ukraine

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 “A strong international voice for business in Ukraine”U.S. EXPORT-IMPORT BANK (EXIM) NOW OPEN FOR UKRAINE

U.S.-Ukraine Business Council (USUBC), Wash. D.C., Tues, Jan 8, 2019

WASHINGTON, D.C. – The Export-Import Bank of the United States (EXIM) is now open for Ukraine. “This is great news for U.S. exporters of goods and services and for business in Ukraine. EXIM being open for Ukraine provides an additional and important tool to expand U.S.-Ukraine business relations in 2019,” said Morgan Williams, President, U.S.-Ukraine Business Council (USUBC), www.USUBC.org. The Export-Import Bank of the United States (EXIM), www.EXIM.gov, is the official export credit agency of the United States. EXIM is an independent Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services. The EXIM country limitation schedule now includes Ukraine, https://www.exim.gov/tools-for-exporters/country-limitation-schedule

“At the end of December, the Export Import Bank of the United States (EXIM) reopened its short and medium term programs in Ukraine for both private and public sector Ukrainian borrowers,” said Alexander Gordin, Managing Director, Broad Street Capital Group, www.BroadStreetCap.com, a long-time member of USUBC. “The reopening  of EXIM’s programs in Ukraine, after more than five years, sends a terrific signal to U.S. companies seeking to supply the Ukrainian market with U.S. goods and services. It also sends an encouraging message to investors on the improving economic condition in Ukraine,” according to Gordin. “The U.S.-Ukraine Business Council (USUBC) will be working the Broad Street Capital Group and the law firm of Brown Rudnick (www.BrownRudnick.com), both members of USUBC, to organize and conduct a series of workshops titled “Fluent In EXIM” in the near future in the USA and Ukraine,” said USUBC President Williams. “These workshops will feature experts from the public and private sector who will present the most effective strategies for structuring export transactions, submitting applications for export credit insurance and financing, as well as passing due diligence and compliance procedures,” Williams announced. 

ABOUT: EXPORT-IMPORT BANK OF THE UNITED STATES (EXIM) —– The Export-Import Bank of the United States (EXIM), www.EXIM.gov, is the official export credit agency of the United States. EXIM is an independent Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services.
When private sector lenders are unable or unwilling to provide financing, EXIM fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales. In doing so, the Bank levels the playing field for U.S. goods and services going up against foreign competition in overseas markets, so that American companies can create more good-paying American jobs.

Because it is backed by the full faith and credit of the United States, EXIM assumes credit and country risks that the private sector is unable or unwilling to accept. The Bank’s charter requires that all transactions it authorizes demonstrate a reasonable assurance of repayment; the Bank consistently maintains a low default rate, and closely monitors credit and other risks in its portfolio.==========================================================
NEWS: For the latest news about Ukraine go to the KYIV POST website: www.KyivPost.com.The Kyiv Post is a member of the U.S.-Ukraine Business Council (USUBC). 
===================================================
U.S.-Ukraine Business Council (USUBC) 
1030 15th Street, N.W., Suite 555 W, Washington, D.C.  
Morgan Williams, mwilliams@usubc.orgwww.USUBC.org
===================================================
Power Corrupts..Absolute Power Corrupts Absolutely

Season’s Greetings!

Grey2White Workshop Hosted by the USUBC, Puts an Exclamation Point on the International Trade Mission

 

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On Wednesday, September 12th, US-Ukraine Business Council (USUBC), in cooperation with the law firm of Brown Rudnick, Broad Street Capital Group and Ankura Consulting, held its second Grey2White ™ workshop in Kyiv. Over 45 guests attended, including the Former First Lady of Ukraine, Kateryna Yushchenko.

IMG-1cae7e700ec217303b52f13cd14e1c96-VThe Grey2White workshop resulted in consensus among the participants on the need of Grey2White program in Ukraine and in other post-Soviet countries. The lively and spirited discussion continued after the official part of the program was concluded.

The workshop’s presenters featured financiers, former prosecutors with the US Department of Justice and enforcement attorney with the US Securities Exchange Commission.

Grey2White workshop served as the exclamation point on the highly successful International Trade Mission through Ukraine and 20160523_094104Uzbekistan, in which the speakers of the Forum participated, along with representatives of eight companies from four countries.

During the Mission, its participants conducted a number of high-level government, NGO and private sector meetings to identify and engage projects in the areas of healthcare, ICT, energy savings, agriculture and aerospace. Over $1.32 billion of project mandates are expected to be awarded to the Mission Participants in the next 60-90 days. Companies wishing to participate in the projects, which have started the development during the Trade Mission, will have an opportunity to learn more during the upcoming International Opportunities conference in November, hosted by the Broad Street Capital Group.


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President of Kazakhstan visits pioneering Center of Tomotherapy and Nuclear Medicine, program managed by the Princeton Healthcare Alliance

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(Astana, Kazakhstan)Yesterday, August 29th, President Nazarbayev of KazakhstaPHA Logon visited a newly opened Center of Tomography and Nuclear  Medicine at the National Research Hospital in Astana the capital of Kazakhstan. Prime Minister of Kazakhstan Hon. Bakhytzhan Sagintayev and the Minister of Health Hon. Elzhan Birtanov were also in attendance.

President Nazarbayev expressed his support for the outstanding effort by Dr. Abay Baigezhin, Director of the hospital and praised the Consulting Radiation Oncologist Dr. Daniel Fass, Chief Medical Officer of the Princeton Healthcare Alliance (PHA), for bringing this state-of- art technology to the people of Kazakhstan.  Dr Fass, who is internationally recognized as a pioneer in Radiation Therapy with over ten years of experience utilizing  Accuray’s Tomotherapy HI-HD equipment explained to the President the unique advantages of that system in treating many malignancies. “This is the first Tomotherapy installation in Central Asia. It is expected patients from throughout the region will…

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President of Kazakhstan visits pioneering Center of Tomotherapy and Nuclear Medicine, program managed by the Princeton Healthcare Alliance

(Astana, Kazakhstan)Yesterday, August 29th, President Nazarbayev of KazakhstaPHA Logon visited a newly opened Center of Tomography and Nuclear  Medicine at the National Research Hospital in Astana the capital of Kazakhstan. Prime Minister of Kazakhstan Hon. Bakhytzhan Sagintayev and the Minister of Health Hon. Elzhan Birtanov were also in attendance.

President Nazarbayev expressed his support for the outstanding effort by Dr. Abay Baigezhin, Director of the hospital and praised the Consulting Radiation Oncologist Dr. Daniel Fass, Chief Medical Officer of the Princeton Healthcare Alliance (PHA), for bringing this state-of- art technology to the people of Kazakhstan.  Dr Fass, who is internationally recognized as a pioneer in Radiation Therapy with over ten years of experience utilizing  Accuray’s Tomotherapy HI-HD equipment explained to the President the unique advantages of that system in treating many malignancies. “This is the first Tomotherapy installation in Central Asia. It is expected patients from throughout the region will be treated at the center.” said Dr. Fass

The clinic will begin treating patients in November and currently has staff training in the Madison, Wisconsin. Building on the success of this project the Clinic plans on expanding to other therapeutic modalities including immunotherapy and stem cell treatments harnessing the advances in precision medicine . Princeton Healthcare Alliance is dedicated to bringing US technology, expertise and financial solutions to improve the lives of citizens in emerging markets the world over.  Next week Dr. Fass, along with other members of the Princeton Healthcare Alliance, will travel to Tashkent, as part of the Trade Mission led by the Broad Street Capital Group (www.broadstreetcap.com) to identify, structure and finance advanced healthcare solutions for the Republic of Uzbekistan

If You Want to Do Business in China, Mind Your T’s: Taiwan and Tibet

Consultants suggest firms mind local laws, customs on disputed territories; concerns over censorship and Beijing’s retaliation

A Gap store in Beijing. The apparel company recently apologized for selling a T-shirt depicting a map of China that omitted Taiwan and other China-claimed territories.
A Gap store in Beijing. The apparel company recently apologized for selling a T-shirt depicting a map of China that omitted Taiwan and other China-claimed territories. PHOTO: GILLES SABRIE/BLOOMBERG NEWS

American companies have lately been quick to apologize for offending China’s geopolitical sensibilities, from listing Taiwan and Tibet as countries on their websites to inaccurately reflecting the status of Chinese-controlled Hong Kong and Macau.

The spate of incidents has business and trade consultants suggesting ways companies can avoid getting into the situation in the first place—among them, hiring China experts, understanding domestic regulations about maps and being mindful of Chinese advertising and cyberspace laws.

This week, Costco Wholesale Corp. COST 0.59% became the latest U.S. company to be pilloried on Chinese social media after images surfaced online of a 2016 letter from one of the retailer’s executives to a Washington group supporting Taiwan’s independence. The letter said the company viewed Taiwan as a “country.” Costco, which has long operated in Taiwan and is preparing to open its first store in mainland China, hasn’t responded publicly and didn’t respond to a request for comment.

American companies such as Delta Air Lines Inc., Marriott International Inc. and Gap Inc.and some European firms have apologized and changed or removed content that China has deemed offensive. China’s recent policing of American companies, followed by those companies’ swift capitulation in most cases, adds another dimension to the intensifying trade tensions between Beijing and Washington. China’s actions also reflect a new reality in which companies seeking to tap the world’s second-largest economy must increasingly contend with officials monitoring the internet for perceived slights and political missteps.

“Because of the political system here, there is no real leeway to lobby or argue,” said Linda Du, founder of a Shanghai-based startup that connects brand-management consultants with global companies.

China has controlled Tibet for decades despite some advocating its independence or greater autonomy. Beijing claims Taiwan as its territory even though the two sides separated in a civil war 70 years ago and the island is now a democracy. Hong Kong and Macau are both part of China, but are governed under the “one country, two systems” formula, which allows them to maintain their own legal, political and economic systems.

A spokesman for the Chinese Foreign Ministry in early May said that foreign companies operating in the country should “respect China’s sovereignty and territorial integrity, abide by China’s law and respect the national feeling of the Chinese people.” The ministry didn’t respond to a request for further comment.

Disney in 2005 received angry emails from Chinese citizens for mislabeling Hong Kong and Taiwan as separate countries in an online form users were asked to fill out for updates about Hong Kong Disneyland. Above, the Hong Kong Disneyland Resort in 2017.
Disney in 2005 received angry emails from Chinese citizens for mislabeling Hong Kong and Taiwan as separate countries in an online form users were asked to fill out for updates about Hong Kong Disneyland. Above, the Hong Kong Disneyland Resort in 2017. PHOTO: LUI SIU WAI/XINHUA/ZUMA PRESS

To respect these distinctions, U.S. firms could study how the State Department, as well as the United Nations and others, refers to China’s territories, said Erin Ennis, senior vice president at the U.S.-China Business Council, a nonprofit representing American companies doing business with China. The pitfalls come about because companies often label these places “countries,” a term that suggests independent entities, Ms. Ennis said, adding that some international organizations call them economies or regions.

For Delta, the largest U.S. airline by market capitalization, its website’s listing of Tibet and Taiwan as countries was what drew the ire of Chinese aviation regulators in January. Delta apologized to Beijing and tweaked a drop-down menu on its online destinations form to read “country/region” instead of “country,” a person familiar with the matter said.

In their rush to tap China’s 1.4 billion consumers, multinational corporations sometimes forget to tune in to cultural differences, said Ted Bililies, a managing director at consulting firm AlixPartners who advises CEOs. “If you want to win at cultural globalization it’s still a game of prevention, prevention, prevention,” he said.

The rise of social media in China has enabled controversies to go viral. Daimler AG’s Mercedes-Benz of Germany in February pulled an Instagram post quoting the Dalai Lama after Chinese state media and social-media users in the country denounced the auto maker. China also ordered Marriott to temporarily suspend its online services in China after the hotelier circulated an online guest survey that listed Hong Kong, Taiwan, Tibet and Macau as countries. And Gap Inc. recently apologized for selling a T-shirt depicting a map of China that omitted Taiwan and other China-claimed territories after an online backlash emerged. It also destroyed the offending merchandise.

Such perceived missteps attracted less scrutiny before social-media use exploded in China. In 2005, Walt Disney Co. drew angry emails from Chinese citizens for mislabeling Hong Kong and Taiwan as separate countries in an online form that users were asked to fill out for updates about Hong Kong Disneyland, a person familiar with the matter said. Disney quickly fixed the problem and sidestepped scrutiny from Chinese authorities, the person added.

Since coming to power in 2012, President Xi Jinping has tightened his grip over the internet, establishing China’s Cyberspace Administration and introducing laws to combat messages that undermine national sovereignty. China added a clause prohibiting advertisements from “damaging the dignity or interest of the state” when updating laws in 2015.

Some business consultants suggest hiring staff who understand local rules and conventions and can review communications before they are made public. That is especially important when companies use third-party vendors to provide some online services, said Washington-based crisis consultant Eric Dezenhall. “Even big companies have some media vendor tweeting stuff…without levels of approval.”

The responses of American companies have raised concerns among lawmakers of censorship and improper retaliation.

“As we have seen with Marriott, Delta, and now Gap, the Chinese government is increasingly extending its ‘long arm’ and economic leverage to interfere in the internal business practices of American companies,” said Sen. Marco Rubio (R., Fla.), chairman of the Congressional-Executive Commission on China, in a statement.

Write to Mike Spector at mike.spector@wsj.com and Wayne Ma at wayne.ma@wsj.com

Appeared in the June 4, 2018, print edition as ‘Avoiding Apologies to China.’

Broad Street expands its risk mitigation services

(New York City, NY, May 2, 2018)   For Immediate Release

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Broad Street Capital Group (BSCG) proudly announces the formation of the Broad Street Risk Mitigation LTD., which will serve as the Group’s risk mitigation and insurance specialist.

Broad Street Risk Mitigation will focus on originating and placing complex Political Risk Insurance (PRI) Transactions, as well as on trade finance, export credit, freight and travel medical insurance for project teams.

In cooperation with several major law firms and government agencies, the company will also focus on development and implementation of FCPA and OFAC compliance policies for its clients.

Heading the new entity will be Mr. Paul Gregory, who has joined the Firm as its Principal and Head of Insurance Operations.  Mr. Gregory brings with him over 40 years of distinguished service in the insurance and risk management fields.  He has held multiple management and directorship positions at the internationally known companies and has been involved in complex insurance transactions in over 20 countries.  Mr. Gregory’s relationship with the Broad Street Capital Group goes back over a decade. He advised the BSCG on several export-related transactions and provided invaluable guidance on the company’s dealings in Kazakhstan and Hungary.

Concurrently, with his joining the Broad Street Risk Mitigation LTD., Mr. Gregory has also accepted an Advisory Board position at the Broad Street Capital Group

About the Broad Street Capital Group

Based in the heart of New York City’s Financial District, Broad Street Capital Group (www.broadstreetcap.com) is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing in the $100 million to $1 billion range, providing political risk mitigation, export management services and cross-border market development advisory. The Firm has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.MerchantShips

The Firm works closely with all trade and development agencies of the U.S. Government and Export Credit Agencies of several European and North American countries. Since its inception, Broad Street Capital Group has been involved in multiple high-profile cross-border transactions in IT/telecom, aerospace, healthcare, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $917 million and expected to exceed $1.5 billion by November 15th, 2018.

For more information contact Alexander Gordin, Managing Director +1 212 705 8765 ext. 701 or via email agordin@broadstreetcap.com

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Broad Street Capital and GreenMax join forces in Africa.

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(New York, April 26th, 2018) Broad Street Capital Group and GreenMax Capital Group join forces to develop and finance large-scale energy projects in Africa.

“We are excited to announce a new partnership with Broad Street Capital Group (BSCG), a New York based emerging markets focused merchant bank. BSCG has recently led a landmark transaction in Ukraine that is a game-changer for enabling financing of parastatal and direct state sponsored infrastructure projects. The facility is a US OPIC wrapped bond issue that for the first time offers 100% long-term debt financing at very low financing rates.” wrote Cliff Aron, Managing Principal at GreenMax.

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Owing to GreenMax’s strong Africa footprint and the company’s longstanding relationship with the Broad  Street Capital Group, the Greenmax organization was selected to lead the introduction of this innovative financing product to the African energy sector. The minimum project size is $150M  and the project must be implemented by a State agency, or parastatal.  In the later case, the host Government must provide a sovereign guarantee.

Broad Street and GreenMax plan to formally launch the product for Africa energy infrastructure at the Africa Energy Forum in Mauritius in June. The joint venture is seeking Power Africa sponsorship for this initiative and expects to be able to secure USTDA grant funding to support the preparation phase for any worthy projects. Although many countries in Africa will qualify for the financing being offered, projects in Nigeria, Uganda, Mozambique and South Africa will be of particular interest.

For more information contact Cliff Aron – cja@greenmaxcap.com

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