Metinvest attracts EUR 24 mln ECA credit for CapEx at Ilyich

Ukraine’s largest steelmaker Metinvest (METINV) has
secured a EUR 24.4 mln credit facility backed by France’s export credit agency
(ECA), Bpifrance, the company reported in a Jan. 14 release. The facility will
be used by Ilyich Steel, Metinvest’s Ukrainian steelmaker, to finance the
construction of an air separation unit (ASU), the holding said. It will mature
in July 2030, and will bear an interest rate of 6M EURIBOR with an unspecified
margin, Metinvest said, adding that the lender will be Raiffeisen Bank
International.

The total investment into the ASU will be USD 78 mln,
the holding reported. The project, equipment for which will be procured from
France’s Air Liquide, will support the expansion of steel production at Ilyich
Steel, according to the release.

Recall in July 2018, Metinvest reported securing a seven-year, EUR 43.2 mln loan
from Raiffeisen Bank International AG secured by Austria’s ECA for the
reconstruction of continuous casting machine No. 4 at Ilyich Steel. In July
2019, Metinvest attracted a EUR 34.4 mln ECA facility
from ODDO BHF, backed by Austria’s ECA, for the reconstruction of mill 1700 at
Ilyich Steel.

Dmytro Khoroshun: This
Bpifrance/Raiffeisen loan is the same one that Metinvest reported on preliminarily in June 2019.
We estimate that Metinvest’s total ECA portfolio has reached about USD 125 mln
after the attraction of the Bpifrance/Raiffeisen loan for the construction of
the ASU at Ilyich Steel. The total of these longer-term, lower-interest loans
might eventually reach 10% of Metinvest’s debt, or about USD 250-300 mln.

We maintain our neutral view on METINV bonds.