Evraz pledged two mills as collateral for VEB loans

Tuesday, 05 May 2009 11:53:07 (GMT+3)   |  
       

Russian mining and steel producer Evraz Group has pledged its Canada-based subsidiary Evraz NA Canada, formerly known as IPSCO, and its Russia-based subsidiary West-Siberian Steel Works (ZapSib) as collateral in order to secure $1.8 billion in credit lines from Russia's state corporation bank for development and foreign economic affairs, Vnesheconombank (VEB), to refinance its foreign loans, the company has said in its 2008 financial report.

On November 21, 2008, Evraz Group secured from VEB a $1 billion loan which was granted in five tranches of $201.3 million each to partially refinance the company's principal installments due in 2008 and 2009 under the $3.214 billion syndicated loan borrowed in November 2007. The loan was secured with the pledge of almost 100 percent of ZapSib shares and the assignment of receivables under certain ZapSib and Nizhny Tagil Iron and Steel Works (NTMK) export contracts, and bears interest at 12-month LIBOR plus a margin of five percent per annum. Each tranche is repayable on the first anniversary of its respective disbursement date, with the final repayment in December 2010.

In addition, on December 10, 2008, Evraz secured from VEB a $800 million loan and pledged 100 percent shares in its Evraz NA Canada, all movable and immovable property of Evraz NA Canada, as well as suretyships provided by NTMK and ZapSib. The loan bears interest at 12-month LIBOR plus a margin of five percent per annum. The facility is repayable in one installment in December 2009. The loan was utilized to refinance the two $400 million bridge facilities arranged in June 2008 for the acquisition of the IPSCO Tubulars business from Swedish specialty steelmaker Svenskt Stal AB (SSAB).


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