MMK Atakaş gets financing for Turkey project

MMK AtakaşMetalurjiSanayi, TicaretveLimanIsletmeciligi A.S (MMK Atakaş, the asset of Magnitogorsk Iron & Steel Works) signed a long-term financing agreement with a number of crediting organizations recently. The financing is needed to put up an integrated metallurgical works in Turkey and the accompanying infrastructure.

The construction began in October 2007 and will probably have been completed by the end of 2010. The project’s estimated capacity comes to 2.3 million tons of flat rolled stock a year; the produce will be delivered onto both the domestic and the export markets.

Magnitogorsk Iron & Steel Works PR Department reports that the financing for the project comprises a ?384m loan coordinated by BNPParibas, SACE (the Italian export loan insurer), and the Royal Bank of Scotland, a $450m commercial loan coordinated by TürkiyeGarantiBankası A.Ş. (62%) and TürkiyeIsBankası A.Ş. (38%), and a $60m loan coordinated by TürkiyeGarantiBankası A.Ş. (50%) and TürkiyeIsBankası A.Ş. (50%).

The first loan, insured by SACE, is needed to finance the delivery of the basic machinery for the project from Danieli& C. OfficineMeccanicheSpA, Italy, and to cover the financing expenses.

The second loan is a regular commercial loan, and the third loan is a credit for inventories meant for the financing all the other sorts of capital investment and expenses.

The project is currently being implemented in accordance with the schedule.

‘Even though a lot of metallurgical projects had to be halted or cancelled, the sponsors of this project - Magnitogorsk Iron & Steel Works in Russia and Atakaş Group in Turkey – did their best to reach their goals. The financing coordinators worked under a recession, but in cooperation with SACE SpA they actually managed to provide us with a complex set of investments. Moreover, the project has been fully inspected by SACE representatives and other authorities for compliance with the environmental and social impact regulations and has met all the IFC/World Bank regulations in these respects,’ Magnitogorsk Iron & Steel Works reports.

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