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Moscow September 15, 2005—
The International Finance Corporation, the private sector financing arm of the World Bank Group, is providing a $20 million loan to Cinema Park, one of Russia’s leading multiplex operators. The company currently operates two multiplexes in Moscow under the Cinema Park brand name. IFC’s financing will be used to build another 10 cinemas in St. Petersburg and seven Russian regional cities by 2007, at a total cost of $128 million.
Cinema Park is majority owned by the Prof Media group, the media arm of the Interros group of companies. Interros is one of Russia’s largest industrial groups, with investments in mining (Norilsk Nickel), banking (Rosbank), power machines (Silovye Mashiny), and agribusiness (Agros) among other sectors. Cinema Park is minority owned by Studio Trite, a Russian film production company, controlled by Russian film producer Nikita Mikhailkov.
The company’s construction of new cinemas will help improve logistics, distribution, and accessibility of films in the targeted regions, thereby improving leisure alternatives for Russians and facilitating the development of the country’s infrastructure for retail and services. Cinema Park will focus on opening cinemas in areas currently underserved by modern multiplex theaters. Consumers will benefit from an improved selection of films. The new multiplexes will create up to 700 jobs and will indirectly create jobs in auxiliary businesses in their supply and distribution chains.
“Cinema Park is a good example of a locally owned company which, though quite young, has its sights set on nationwide expansion,” said Edward Nassim, director of IFC’s Central and Eastern Europe Department. “Cinema Park is pursuing an aggressive expansion strategy to keep up with Russia’s fast-growing retail and services sector, and we are pleased to be able to be a part of it,” added Dimitris Tsitsiragos, director of IFC’s Global Manufacturing and Services Department.
“Cinema Park is IFC’s first project with a cinema chain, and we are truly proud of this fact,” said Marina Jigalova, Prof-Media First Deputy CEO. “For Cinema Park, having IFC as a partner is like a ‘stamp of approval,’ backing our aspirations for Cinema Park’s success.”
The investment complements IFC’s considerable existing investment portfolio in Russia’s retail sector and signifies IFC’s commitment to developing the country’s retail infrastructure. Russia became a shareholder and member of IFC in 1993. As of September 1, 2005, IFC has invested around $2.5 billion of its own funds and syndicated over $245 million in more than 110 projects in the country across a variety of sectors. IFC’s portfolio in Russia stands at $1.7 billion, and Russia is the largest country exposure in IFC’s global portfolio. IFC’s investments are spread across the country’s most important sectors including banking, leasing, housing finance, infrastructure, mining, agribusiness, pulp and paper, construction materials, oil and gas, telecommunications, information technologies, retail, and health care.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
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