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

(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

Broad Street Capital Group to lead an international Trade Mission to Uzbekistan.

For Immediate Release

BSCGLogoNew York, August 26, 2018. Fresh from its success of developing a pioneering $250 million, 20-year OPIC insured, capital markets financing, Broad Street Capital Group announced today that it will lead an international Trade Mission to Uzbekistan between September 5th and 9th, 2018.

The goal of the Trade Mission is to identify and engage large project development and financing opportunities in the areas of health care, distributed and renewable energy generation, agriculture, ICT and aerospace

With its proven ability to develop and structure complex financing solutions ranging from $100 to $500 mil., and utilizing support of Export Credit Agencies (ECAs)such as US EXIM Bankand of US government development institutions,
such as Overseas Private Investment Corporation (OPIC), Broad Street Capital Group is uniquely positioned to bring low-interestlong-term financing to projects to be developed by the Trade Mission participants and supported by the Government of Uzbekistan.

The mission participants will also introduce an innovative Grey2White™ initiative designed to assist local companies in becoming more bankable and transparent to western partners and international financial institutions.

Joining Broad Street Capital’s team during the upcoming Mission will be representatives of US, UK and Israeli companies, international law firms and professional organizations. The delegation will be led by Mr. Alexander Gordin, Managing Director of the Broad Street Capital Group and will meet with a number of federal and local Government Officials, project sponsors and company owners in Tashkent.

Uzbekistan represents a tremendous opportunity for international project development and international business cooperation,” said Alexander Gordin. “Policies implemented by President Mirziyoyev have been very effective in attracting foreign investment, supporting technology transfer and focusing on growing key areas of the Uzbekistan’s economy,” added Gordin.

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 maintains a permanent presence in Astana, Kazakhstan and Kyiv, Ukraine.  Since its founding, Broad Street Capital Group has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.

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, health care, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $900 million and expected to exceed $1.5 billion by November 15th, 2018.

For more information contact: Rustem TursynRepresentative for Central Asia
+1 212 705 8765 ext. 707, or via email rtursyn@broadstreetcap.com

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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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Grey2White Initiative – the journey continues (parts I and II)

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(Part I of the article reprinted from the June 2017 issue)

Hypothesis:

Given Ukraine’s current economic and geopolitical situation, one of the most beneficial  steps the US government, business and NGO community can take, is to encourage significant external and internal direct investment into the country’s economy.

Although the US Government has had some success in attracting and supporting American direct investment into Ukraine, those investment amounts are far from sufficient. US investors new to the Ukrainian market are wary of the country’s reputation for corruption, difficulty in doing business, threats from Russia and lack of financing options.

A second and much more viable economic development option, would be to support and enable direct investment by the successful Ukrainian business people who have amassed sufficient capital and are much more comfortable and adept in investing in their home market.

One problem with pursuing that option are high Western standards, which often preclude US government development agencies and public US investors from working with this potential class of investors.  This is due to the fact that for the last twenty-five years, practically all business people in Ukraine had to operate under a certain set of conditions widely considered “grey” and in many cases “black” in the West.

Some of these “grey” conditions are lack of financial transparency, inadequate corporate governance, use of yellow press, use of cash, as well as offshore accounts to conduct operations, bribery and use of adverse political influence.

In their attempts to succeed, some folks in Ukraine went beyond previously acceptable business norms and crossed the proverbial line even further by engaging in criminal “black” behavior – graft, extortion, corruption, tender rigging and illicit drug trade.

To date, these grey conditions have presented significant challenges for the IFIs, development agencies and regulated financial US investors. Yet, it is vital to recognize the necessity to find an acceptable solution that allows Ukraine’s economy to reap significant benefits from the anticipated increase in direct investment and low-cost, long-term financing.

It is also very important to understand that the proposed Grey2White (G2W)™ initiative aims to broaden and scale up very important development and capacity building work already undertaken over the last quarter century by IFIs, such as IFC and EBRD, USAID; development agencies such as OPIC and USTDA and financial investment communities. Those initial efforts, although quite effective, focused on a relatively small sample of Ukrainian companies and were undertaken during a different stage of the country’s development.

Initiative

The G2W™ initiative will only work with those companies and individuals, who will be able to create meaningful economic impact in Ukraine, after undergoing the conversion process.  G2W™ will not in any way target those convicted of the “black” behavior, as their reputation gap is un-bridgeable within the scope of the project.

Thus the question becomes, is it possible for US stakeholders to create an environment and a broad platform from which so-called “grey” Ukrainian businessmen seeking to utilize US financing, equipment, services and franchises, as part of their major investment programs, become “bankable” under Western standards? If the answer is “Yes.”This type of conversion will provide hundreds of millions, if not billions of dollars in direct economic benefit and enhanced geopolitical security to Ukraine and to the US.

If the answer is “No,” these businessmen will either be forced to forgo the planned capital investments, or seek alliances with other grey, or black global actors in countries like Russia, China, Brazil, Iran, etc.

It is the fundamental belief by the creators of the proposed initiative that given a concerted effort by the US and Ukrainian stakeholders to develop and implement realistic procedures to increase corporate transparency, introduce financial standards, address any existing reputation issues head-on and provide reputable outside management and board oversight, it is possible within short to medium time-frames to bring these so called “grey” businessmen and their respective projects up to elevated western standards, mitigate investment and reputation risks and affect substantial economic growth in Ukraine.

Thus we hereby propose the following:

Select three-four financially viable projects sponsored  the “grey” Ukrainian actors and use them as a pilot to develop, refine and implement an effective conversion strategy to bring that project up to acceptable Western standards.

From the government side, we propose to involve the US Commercial Service, USTR, US Embassy, Ukrainian Embassy, Cabinet of Ministers of UA, members of the US Congress focused on UA issues, OPIC, regional Governors and local administrations in Ukraine, IFC, USTDA and the US EXIM Bank (when that Agency resumes its activities in Ukraine).

Among the NGO stakeholders we would like to see US-Ukraine Business Council (USBC), AMCHAM, Transparency International, Freedom House, Atlantic Council and US Ukraine Foundation. Additionally, reputable international law firms, audit firms, press, appropriate private individuals, corporate off-takers, financial market regulators, as well as relevant providers of US goods and services should be involved.

The framework of the proposed initiative shall be as follows:

  • Initial Sponsor/Project assessment and preliminary due diligence
  • Project selection and stakeholder awareness and involvement
  • Project G2W™ Team building (attys., directors, advisers, auditors, suppliers, investors etc.)
  • Full due diligence and implementation plan for the Western financial, FCPA and governance standards
  • Investor cultivation and underwriting of the financing package
  • Project development and implementation
  • Monitoring and compliance

To kick off the proposed initiative, we propose an intensive education and awareness-building campaign designed to simultaneously involve all the stakeholders.

After the initial buy-in into the initiative is secured, work will begin on developing the pilot projects.

During the pilot project phase, the G2W pilot project team will be seeking to achieve specific and tangible goals:

  • Fully assess the existing reputation risks, possible political influence issues, suitability for OPIC/IFC financing and Political Risk Insurance for the US project participants
  • Prepare a legal due diligence report by a world-class law firm
  • Recruit highly reputable and competent outside board members to the Project’s Board
  • Design a comprehensive PR/IR strategy to inform stakeholders of the project and its ongoing developments
  • Design and implement transparent financial audit, reporting and management accountability standards
  • Develop ways to tangibly measure economic effect of the pilot project
  • Continue to promote the initiative and seek to move it from the pilot project phase to full-blown implementation.

(to be continued)

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Part II  (April 2, 2018)

In the nine months since the above article was first published, a number of events took place, which not only validated the concept behind the Grey2White™ initiation, but also expanded its scope and attracted top notch global professionals to the program.

Although initial premise of the program to convert grey actors in Ukraine to white bankable actors, whose economic contribution will greatly outweigh any possible transgressions they may have committed up to this point remains intact, the program has been expanded to include other emerging market countries of Eastern Europe and Central Asia. The program also grew to allow so-called grey companies to unlock their value through financial and legal transformation in order and become more bankable in the Western capital and financial markets. Part of this transformation involves tools, which on one hand provide increased political protection to the current management and to foreign investors, and on the other hand allow western companies to lock up predictable valuations and to observe the transformation process first hand.

A first rate international “scrub team” has been assembled as a multidisciplinary team consisting of former US Government prosecutors, forensic accountants, legal and financial experts and last but not least, former high-level grey operator with deep expertise in shadowy government and business dealings in Ukraine and several other  post-Soviet countries.

A pilot company and its owner have been selected, as the first of four pilots companies to undergo Grey2White™ transformation in order to make them bankable by US Development Agencies for a $150 million project slated to create over 200 new jobs and to generate significant economic impact in Southern Ukraine.

In the next 60 days. key members of the G2W™ Team are expected to travel to Latvia, Kazakhstan, Azerbaijan, Uzbekistan and Ukraine to conduct additional screening and selection of the pilot companies and individuals.

In the subsequent parts of this article, we will examine the different case studies and watch the pilot candidates undergo the first steps of the Grey2White™ transformation.

(to be continued…)

 

Financing Feasibility Fund I (FI3F) – a $30 mil. Global Project Development Fund announced by the Broad Street Capital Group

(New York City, NY, February 20, 2018)   For Immediate Release

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Fresh from its recent success, as the Financial Developer of the $250 million OPIC insured capital markets financing for NAEK Energoatom of Ukraine, Broad Street Capital Group has fi3f_badgeannounced today that it will establish a $30 mil. Financing Feasibility Fund I (Fi3F™) – a global project development fund to provide feasibility grants and pre-financing development funding for qualified emerging markets’ OPIC-insured infrastructure projects to be financed in the US capital markets.

The Fund will provide qualified Governments and State-owned borrowers feasibility seed funding in the amounts between $350,000 and $1 million dollars and pre-financing bridge loans in the amount of $1.25 to $2.5 million per project.

The Fi3F™ Fund will develop and seed international projects whose financing requirements fall between $150 mil. and $1 billion, and which will span the industry segments ranging from energy, airspace, transportation to agriculture, infrastructure and healthcare. The projects should be located in credit-challenged emerging market countries, which represent priority markets under OPIC’ development finance and insurance mandate. Financing terms for the projects will be between 10 and 20 years. A strong US supply nexus and willingness of the host governments  to provide sovereign guarantees for the financing, will be key considerations during the project selection stage.

Participation in the Fi3F™ will be open to qualified private and institutional  investors, with at least 51% of all the shareholders being US nationals. The management of the fund will utilize proven project development techniques and will be administered by an experienced team consisting of leading legal, insurance and financial experts, a placement agent and the financial developer. The Fund will obtain Political Risk Insurance from OPIC to protect its funds and will retain a top tier investment bank to act the the Paying Agent to administer all the payments and disbursements. Fi3F’ returns are targeted to fall in the 12-17% range annually.

Call for the first round of Financing Feasibility Proposals will commence April 25, 2018.

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.

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 $417 million and expected to exceed $1.5 billion by November 15th, 2018.

This announcement is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the Company or any related or associated company. Any such offer or solicitation will be made only by means of the Company’s confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. None of the information or analyses presented are intended to form the basis for any investment decision, and no specific recommendations are intended.

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

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