The Russian mining and steel producing company Mechel has announced that it has signed a new $471.2 million loan agreement to finance the biggest investment project in its steel division, i.e., the construction of the new universal rolling mill at its subsidiary Chelyabinsk Metallurgical Plant, thus ensuring its timely execution.
Accordingly, the new $471.2 million senior term loan facility, entirely fronted by BNP Paribas S.A., consists of three tranches underwritten by BNP Paribas S.A., GPB and UniCredit Corporate Banking S.p.A.
The purpose of the facility is to finance payments under two contracts: the equipment and technology supply contract signed with Italian company Danieli & C. Officine Meccaniche S.p.A., and the general construction contract with MinMetals Engineering Co., Ltd.
"The universal rolling mill is a strategic project for our group and for infrastructure development in Russia. When it is installed it will primarily manufacture high quality railroad rails up to 100 meters in length using state-of-the-art rolling technology. This product along with high quality structural shapes will dramatically improve the efficiency at Chelyabinsk Metallurgical Plant and of the entire steel division of our group," Mechel CFO Stanislav Ploshchenko stated.
Mechel's new landmark loan agreement was signed only a week after its successful refinancing of $2 billion of foreign debt.