17 Nov 2009 15:37
MMK Atakas Closed Financing for Integrated Flat Steel Making Complex in Turkey
Istanbul, November 17, 2009
MMK Atakas Metalurji Sanayi, Ticaret ve Liman Isletmeciligi A.S (MMK Atakas), a Turkish project company, closed the long term financing for the construction of its integrated flat steel making complex and related infrastructure facilities in Turkey (the "Project"). Designed annual capacity of the Project is 2.3 mm tonnes of flat steel products for sale in domestic and export markets. The Project was kicked off in October 2007 and is expected to be completed by the end of December 2010.
The financing package comprises:
a EUR 384 million SACE backed export credit facility, arranged by BNP Paribas, SACE and The Royal Bank of Scotland and insured by SACE to finance the main supply contract with Danieli & C. Officine Meccaniche SpA (Italy) along with associated financing costs;
a USD 450 million commercial facility arranged by Türkiye Garanti Bankası A.Ş. (62 %) and Türkiye Is Bankası A.Ş. (38 %), together with a USD 60 million working capital facility arranged by Türkiye Garanti Bankası A.Ş. (50 %) and Türkiye Is Bankası A.Ş. (50 %), for the financing of other capital expenditures and Project costs.
The Project has been progressing according to the construction schedule in spite of the recent global downturn in steel industry and difficulties in raising financial resources in the financial markets. Notwithstanding many steel projects were delayed or cancelled, the Sponsors of the Project - OJSC MMK (Russia) and Atakaş Group (Turkey) - committed all necessary resources and efforts to achieve the Project's goals. The arrangers worked through the financial crisis and, together with SACE, managed to close the financing which enjoys a solid security package. A comprehensive Environmental and Social Impact Assessment has been conducted 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, Norton Rose and Hergüner Bilgen Özeke provided legal support to MMK Atakas and the Sponsors.
About MMK Atakas
MMK Atakas is a Turkish company jointly owned by OJSC MMK and Atakaş Group which was established in 2007 for engineering, constructing and operating of an integrated flat steel making complex with annual production capacity of 2.3 mm tonnes of finished flat steel products located at two sites in Iskenderun and Kocaeli (Gebze).
About OJSC MMK
OJSC MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added goods. In 2008 the company produced 12 mm tonnes of crude steel and 11 mln tonnes of commercial products. MMK Group revenues in 2008 stood at USD 10.55 bn.
About Atakaş Group
Atakaş Group is the biggest coal importing group in Turkey and it is mainly involved in imported coal related activities. The group also owns sieving and packing facilities in İskenderun, Marmara and Black Sea regions with the total annual capacity of 2 mm tonnes. The group's assets also include two factories for production of pressed coal in accordance with best European standards with the annual capacity of 500'000 tonnes located in Turkey at two sites in Iskenderun (Payas) and Kocaeli (Gebze).