Metinvest attracts EUR 34 mln ECA credit for CapEx at Ilyich

18 July 2019

Ukraine’s largest steelmaker Metinvest (METINV) has secured a EUR 34.4 mln credit facility backed by Austria’s export credit agency (ECA), the company reported in a July 17 release. The facility will be used by Ilyich Steel, Metinvest’s Ukrainian steelmaker, to finance the reconstruction of its rolling mill 1700, will mature in August 2028, and will bear an interest rate of 6M EURIBOR with an unspecified margin, Metinvest said, adding that the lender will be ODDO BHF, a Franco-German financial services group.

 

The total investment during the current phase of the mill 1700 reconstruction project is expected to reach USD 110 mln, the holding reported. The project will expand the range of hot-rolled coil products the mill is able to produce, improve the quality, reduce production costs and increase the mill’s annual capacity to 2.5 mmt from 1.36 mmt, according to the release.

 

Recall, in July 2018 Metinvest reported securing a seven-year, EUR 43.2 mln loan from Raiffeisen Bank International AG also secured by Austria’s ECA for reconstruction of continuous casting machine No. 4 at Ilyich Steel. Metinvest completed this project in March. In June, Metinvest attracted a loan of an unspecified amount backed by France’s ECA for the construction of an air-separation unit at Ilyich Steel.

 

Dmytro Khoroshun: As we expected, Metinvest continues to expand its ECA-backed loan portfolio, which we estimate has reached about USD 125 mln after the attraction of the ODDO BHF loan. 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 bullish view on METINV bonds.