The Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) has announced that MMK Atakas Metalurji Sanayi, Ticaret ve Liman Isletmecilgi A.S (MMK Atakas), its 50 percent plus one share-owned joint venture company with one of the leading Turkish mining companies Atakas, has secured long-term financing for the project which includes the construction of its integrated flat steel-making complex and related infrastructure facilities in Turkey.
As per MMK's statement, the financing package for the MMK Atakas project comprises a €384 million export credit facility, backed by the Italian export credit agency SACE, arranged by BNP Paribas, SACE and The Royal Bank of Scotland and insured by SACE, to be used to finance the main supply contract with the Italian plantmaker Danieli & C. Officine Meccaniche S.p.A. along with associated financing costs. MMK Atakas' financial package also includes a $450 million commercial facility arranged by the Turkish banks Türkiye Garanti Bankası A.Ş. and Türkiye Is Bankası A.Ş. in the amount of 62 and 38 percent respectively, together with a $60 million working capital facility also arranged by Türkiye Garanti Bankası (50 percent) and Türkiye Is Bankası (50 percent), for the financing of other capital expenditures and project costs.
As SteelOrbis previously reported, the joint venture company MMK Atakas, was established in 2007 for the planning, construction and operation of an integrated flat steel-making complex, located at two sites in Iskenderun and Kocaeli. The annual production capacity of the complex will be 2.3 million metric tons of flat steel products for sale in the domestic and export markets.
"The project has been progressing according to the construction schedule in spite of the recent global downturn in the steel industry and difficulties in raising financial resources in the financial markets. The arrangers worked through the financial crisis and, together with SACE, managed to close the financing which enjoys a solid security package," reads the company's statement.
MMK Atakas' flat steel-making complex and related infrastructure facilities in Turkey are scheduled to be completed by the end of December 2010, and have already passed the comprehensive Environmental and Social Impact Assessment in accordance with IFC/World Bank standards and under the supervision of SACE.
Clifford Chance Europe LLP and Pekin & Pekin acted as the finance parties' legal advisors, while Norton Rose and Hergüner Bilgen Özeke provided legal support to MMK Atakas and the sponsors.