OREANDA-NEWS. The Board of Directors approved the use of investment partnerships as a mechanism for creating new private equity investment funds under the management or co-management of RUSNANO and instructed RUSNANO management to work on creation of the first such partnership. The decisions were made as part of RUSNANO's mission to support the development of a market for private equity investment in Russia's high-tech sector.

The Board also approved a new version of the Regulation “On the procedure and conditions for the financing of investment projects by OJSC RUSNANO”, in order to assist the functioning of such investment partnerships.

The Board of Directors took note of the report by RUSNANO Management Company LLC on the investment performance of RUSNANO in the first half of 2014. The Board also heard the preliminary report of the Management Company on the management contract for the third quarter of this year, the final version of which will be presented at a future meeting of the Board.

The Board of Directors approved changes to the investment project “Industrial production of prepregs using nano-modified carbon and mineral fibers and nano-modified binders.”

Production facilities for the project have been installed at the Moscow Technopolis and Dubna Special Economic Zone, unique manufacturing equipment has been commissioned and more than 30 products have been designed.

However, slow growth of the Russian market for polymer composite materials has caused lack of demand from several key Russian consumers, and development of sectors which make greatest use of such materials (automotive manufacturing and wind power) has been disappointing. As a result, the company implementing the project, Prepreg-SKM, has not been able to find regular customers and make long-term contracts up to now.

The company's business and ongoing projects are crucial for meeting demand for composite materials from Russian enterprises in various industries, and also for success of the state program of import substitution.

Development of the composite materials industry has strategic importance for Russia, as reflected in Government industrial policy. The Russian Minister of Industry and Trade, Denis Manturov, has sent a letter to the head of RUSNANO, Anatoly Chubais, requesting support for the Prepreg project and emphasizing its strategic importance.

The shareholders of Prepreg-SKM have therefore prepared various scenarios for restructuring of the project, taking account of the uniqueness of company production, professionalism of the team working on the project and the fact that certification of its products is almost complete (certification is of crucial importance for winning customers).

As a result, the RUSNANO Board has approved the conversion of loans and interest on loans into equity stakes in Prepreg-SKM. RUSNANO and its co-partner, Composite Holding Company, have also agreed to provide additional funding.

The RUSNANO Board of Directors heard information on exit by the corporation from the investment project “Implementation of RFID technology in retail trade using nanotechnology solutions”. The decision to exit was taken earlier by the Executive Board of RUSNANO Management Company LLC (the scale of project financing allows the Executive Board to make the exit decision).

The project has developed innovative solutions for the application of radio frequency identification (RFID) technology in food retail and logistics. The solutions have been tested at a food store attached to the central office of X5 Retail Group. Intellectual property rights to the technology are owned by the project initiators: RUSNANO, OJSC Sitronics and CJSC Perekrestok Trading House. RUSNANO intends to apply the property in a wide range of RFID projects.

The Board of Directors approved main terms for exit by RUSNANO from the investment project “Production of functional proteins from animal raw materials and their use to make end-products with improved biological properties” via the sale of RUSNANO's equity interest to the investee company, Rosana.

Rosana's output is intended primarily for use as ingredients in various products with high value-added, including diet-, sport- and baby-food, as well as specialized cosmetics. However, rates of growth in demand for this type of goods in Russia have been lower than expected, as a result of which the use of Rosana's functional components has not attained target levels. Full-scale production of high-purity functional proteins has proved to be ahead of its time in Russia.

RUSNANO, in agreement with the other investor in Rosana and based on results of the analysis of options by an independent consultant, has therefore decided to discontinue its participation in the project.

The Board of Directors decided to make changes to main terms of the investment project “MRAM: production of magnetoresistive RAM in Russia”. The mechanisms for financing of project companies have been amended without alteration of the overall project budget. As previously reported, the funding will be used for the completion of a full production cycle for magnetic memory cells using standard CMOS wafers at the site of Crocus Nanoelectronics LLC.