Metinvest Holding raises $1.5 billion loan

12:53, 30 July 2007
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A private Ukraine company received a huge credit

Metinvest Holding, the managing company for the mining and management assets of System Capital Management Group (SCM), has raised a $1.5b syndicated loan facility with four banks - ABN AMRO, BNP Paribas, Deutsche Bank and ING - acting as the lead managers for the facility, according to the company’s press-release. BNP Paribas will also act as the loan holder and documents coordinator. In the course of arrangement of the facility the borrower was provided with legal advice by Baker & McKenzie law firm. The lead managers were advised by Denton Wilde Sapte in the UK and Okhrimchuk, Grushin, Khandurin law firm in Ukraine.

      The loan facility consists of two parts. The first part of $1 billion was obtained on 23 July in the form of pre-export financing (loan secured on export contracts). The second part of $500 million is an open revolving loan facility.

      “This loan is unique in many ways. Firstly, it is the largest loan raised by a privately-owned Ukrainian company. Secondly, the company managed to secure borrowing conditions which are the most favourable a private Ukrainian company has ever had”, said Sergey Novikov, CFO for Metinvest Holding.

      The syndicated loan margin is calculated on the basis of Libor + 1.7%, which is the best Libor rate for a Ukrainian business.

      “In the next five years Metinvest is planning to invest more than $4 billion in development of its business – and this is just for the organic growth of the business.

This money will be utilized for modernization of production facilities of our companies, for introduction of new technologies, including those to improve automatisation of production facilities and raise safety standards. Our aim is to create a contemporary world class mining and metal company”, said Igor Syry, CEO for Metinvest Holding.

He added: “For implementation of such large-scale plans we will invest our own money and also raise funds on the international capital markets. Some companies within Metinvest already enjoy good credit history and this transaction is the first case when the managing holding company comes to the western debt capital markets”.

      The term of the credit facility is five years. The money will be utilized for general corporate purposes, capital investments and refinancing of more expensive loans. The loan syndication is expected to be finalized in early October 2007.

      “The scale of the loan and the list of lead managers allows Metinvest to secure one of the leading positions among Eastern European borrowers, which also confirms the attractiveness of Ukrainian companies on the international market for syndicated loans”, said Sergey Boychenko, Head of the CIS Structured Financing Department of BNP Paribass.

      Metinvest Group is the leading mining and metals holding in the region and one of the leading players on the world market of iron and steel industry. Companies of the Group produce over 5 million tone of coke and over 16 million tone of iron ore raw materials not only covering the Group’s own demand, but also acting as the key suppliers for other Ukrainian steel companies. The Group accounts for 30% of Ukraine’s production of iron ore raw materials and 20% of Ukrainian steel production. Metinvest also accounts for 12% of the world market of marketable billets, 10% - of marketable slabs, 9% - of strips, 5% - of thick plates market

      LLC Metinvest Holding is the managing company of Metinvest Group. LLC Metivest Holding is owned by Dutch company Metinvest B.V. (51.15%) and JSC SCM (48.85%). 100% of Metinvest B.V. is owned by SCM (Cyprus), 90% of JSC SCM is owned by Rinat Akhmetov.

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