Following a three times oversubscription during syndication, NLMK Europe increased the amount of its 4-year syndicated revolving collateralised finance facility from Euro 325 million to Euro 400 million. The funds raised will be utilised for working capital and other corporate purposes for NLMK Europe Sales S.A., NLMK Coating and NLMK Verona Steel. The facility was closed and funded on July 18th, 2011. The facility carries a margin of 1.45%.
The facility is led by Deutsche Bank AG as Coordinator, Facility Agent, Collateral Agent and Bookrunner. The facility closed with a syndicate of 15 banks: BayernLB, Munich; Credit Agricole Corporate and Investment Bank; Citibank; Deutsche Bank AG, Amsterdam Branch; DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main; HSBC Bank plc; ING Belgium SA, Geneva Branch; NATIXIS; OJSC Nordea Bank; Raiffeisen Banking Group Austria; Societe Generale CIB; UniCredit; WestLB AG; KBC Bank, Succursale Francaise and Banca Monte Paschi Belgio S.A.
The transaction follows the recent acquisition of the remaining 50% of shares in Steel Invest and Finance by OJSC NLMK and the creation of NLMK Europe. The new Facility allows for a more flexible and uniform use of credit between NLMK Europe's operating companies. The Facility is secured by a borrowing base of inventories and receivables and is supported by a guarantee from the parent company OJSC NLMK.
Benedikt Reithofer, CFO, NLMK International: “We are very proud of the closing of this important syndication which could be structured thanks to the strong support of NLMK. The excellent and unique structure of the deal was very well received by the market with an oversubscription of three times the requested amount and allows NLMK Europe to simplify its working capital lines with a single credit facility that optimises our utilisations in the various countries."
Kris Van Broekhoven, Head of Structured Commodity Trade Finance for EMEA at Deutsche Bank, adds: "This is a very complex transaction, not only because it has multiple borrowers and spans seven separate legal jurisdictions but also because it refinances four previously stand-alone syndicated working capital facilities in addition to a number of unsecured credit lines and links into two receivables finance programmes. This would not have been possible without the dedication and professionalism of the deal teams on both sides."
Boris Jaquet, Director from Deutsche Bank's Distribution and Emerging Market Loan Trading comments: "The size of the oversubscription and the diversity of the pool of committed banks are a testimony to NLMK’s superior relationship with its banking group. We are proud to have been the sole bookrunner for this transaction for NMLK Europe. The result of the syndication clearly indicates that the combination of appropriate structure, pricing and syndication strategy can deliver a landmark transaction in what is still a somewhat challenging bank market".
NLMK is one of the world’s leading producers of steel with 2010 revenue of $8.4 billion and the EBITDA margin of 28%. In 2010 the Company produced 11.5 m tonnes of steel. NLMK production facilities located in Russia, the EU and US employ around 60,000 people.NLMK delivers its products to customers from over 70 countries. NLMK shares are traded in Russia on MICEX and RTS, and, in the form of GDRs, on the London Stock Exchange.