Alchevsk Steel draws USD 155 mln in debt from parent

Alchevsk Iron & Steel (ALMK UK) took another USD 155 mln tranche of a USD 865 mln five-year credit line from Margit Holding Limited (Cyprus) approved at the end of 2011 with an interest rate of 5.125%, Interfax reported yesterday. With this tranche, the company has drawn USD 492 mln or 57% of the total credit line.

Roman Topolyuk: Though there has been no official confirmation, we believe the debt financing was ultimately provided by Alchevsk Steel’s parent, Industrial Union of Donbas, a controlling interest in which is held by Russian investors. We believe the funds will be channeled to refinance previous loans from third-party lenders (USD 214 mln in such debt matures in 2012) and to pay for its investment program (USD 215 mln approved for the current year).