OREANDA-NEWS. Chelyabinsk Pipe Rolling Plant (ChTPZ, Chelyabinsk, Russia) (RTS: CHEP), a part of ChTPZ Group, and the European Bank for Reconstruction and Development sign ? 205 million loan agreement.

According to the press service of CHTPZ Group, the loan is divided into two tranches – ? 145 million and $ 80 million.

Part of each loan is being syndicated to commercial banks. The tenor will be nine years for the portion of the EBRD’s loan and seven years for the remaining portion and the syndicated loan. 7-year tenor of syndicated part is the longest achieved in the Russian metallurgical sector.

The loan is primarily intended to finance construction of a new mini-mill at Pervouralsk New Pipe Plant (PNTZ, Pervouralsk, Sverdlovsk region, Russia) (RTS: PNTZ). The funds will also be used to restructure the Chelyabinsk Pipe Plant’s balance sheet to help it implement its investment programme and to improve energy efficiency at both pipe plants in Chelyabinsk and Pervouralsk.

The total cost of the mini-mill construction project is about ? 300 million, part of which will be financed by EBRD and another part will be financed with the company's gainings.

The new complex will produce round steel billets with capacity of 950 thousand tons per year and will allow supplying the ChTPZ Group’s Ferrous Division enterprises – Chelyabinsk Pipe Rolling Plant and Pervouralsk New Pipe Plant – with high quality, semi-finished raw material for the production of seamless pipes meeting all standards and requirements. The new production process will use modern technologies of iron-bearing material processing, supplied by SMS Demag – world's leader in production of metallurgic equipment. The launch of the mini-mill is scheduled for late 2008.