In December 2012, FMO closed a transaction with LLC “Okkoskhidinvest”. Okkoskhidinvest is a joint venture between PJSC “Concern Galnaftogaz” (“Galnaftogaz” or “GNG”), a major Ukrainian petrol station operator and ADM Capital (“ADM”), a Hong-Kong based fund management company. Both GNG and ADM are existing clients of FMO since 2011 and 2010 respectively. Main purpose of the financing is to develop a network of gas filling stations in the eastern part of Ukraine, where GNG currently has little presence. Total project costs were estimated to be around USD 165mln and IFC was asked to arrange the financing package of USD 80mln. FMO participated in an IFC-B loan with USD 27.5mln.
The gas filling stations will operate under GNG’s proprietary OKKO brand and will comply with up-to-date environmental and technical specifications. The format for OKKO stations is designed to maximize services offered to clients. In addition to selling petroleum products, gas filling stations also sell snacks, fast food, and other automotive-related services (car wash, car repair etc). The stations will be refurbished or built according EU standards, in which the underground fuel tanks have double steel hulls and leak detection devices. Consistently high quality products help to attract and retain loyal customers to OKKO stations because Ukraine does not yet have a strict minimum level for the quality of fuels (e.g. EURO-4 or above). Other distributors (the black market) often sell petroleum products of lower standards and lack proper quality controls. The number of GNG employees is expected to grow by 500-750 on the back of expansion.
