OREANDA-NEWS. May 20, 2008. Donbass Fuel-Energy Company has completed its debut internationally syndicated loan facility with the signing of a USD 150m term loan. The transaction has a maturity of two years with a one year extension option and carries a margin of 3% over LIBOR.
 
Barclays Capital (the investment banking division of Barclays Bank PLC) and Standard Bank Plc were appointed as joint Bookrunners and Initial Mandated Lead Arrangers. The following banks have also joined the syndicate: Erste Bank der Oesterreichischen Sparkassen AG, Raiffeisen Zentralbank Цsterreich Aktiengesellschaft, EFG Private Bank (Luxembourg) S.A., ABN AMRO N.V., Banque Cantonale de Geneve, Morgan Stanley Bank International Limited and The Export-Import Bank of the Republic of China. Legal advice for the transaction was provided by ‘Okhrimchuk Grushin Khandurin’, ‘Linklaters’, ‘Saenko Kharenko’ and ‘Aristodemou Loizides Yiolitis & Co’ law firms.
 
 ‘Donbass Fuel-Energy Company’ (DTEK)is the first private vertically-integrated energy company in Ukraine, incorporating coal mining (Pavlogradugol OJSC, Komsomolets Donbassa Mine OJSC), generation (Vostokenergo Ltd.) and electricity supply (PES-Energougol OJSC, Service-Invest Ltd.) enterprises.

Comments of experts
Robert Chagalyan, Head of the Financial Service Department of ‘SIEMENS Ukraine’:
 
Taking into account the company’s age, the rules for entering the international loan markets, the current situation in those markets, DTEK’s development rate is quite high. It is obvious that a highly professional management team has been operating.
 
Felix Indenbaum, the Treasury Head of Ukrsotsbank KSCB:
 
In the financial turmoil to have caused not only the abrupt resource appreciation, but the liquidity problem in general, the 6.475% EIR deal comes out to be more than successful.
 
John Penn, Head of Structured Trade Finance of Standard Bank:
 
We are delighted to have concluded this debut facility for DTEK. Although the market for raising debt has been challenging, the quality of the DTEK name (and the SCM group) ensured a successful syndication at the target amount.
 
Yuriy Ryzhenkov, the CFO of DTEK:
 
The stable financial stance of the Company, its competent management of assets and liabilities, and a well-balanced approach to risk management have contributed to an increased interest of foreign banks to financing DTEK. In autumn 2007, DTEK was given a positive evaluation by international rating agencies: in October, Moody's Investors Service assigned a long-term CorporateFamily Rating of B2; and Fitch Ratings assigned a Long-term Issuer Default rating (IDR) of ‘B+’, a Short-Term IDR of ‘B’ with ‘Stable’ outlook.  The attraction by DTEK of its first public loan is yet another sign of trust from large international financial institutions, an evidence of the Company’s good reputation and its stable position among the country’s energy enterprises.
 
The funds raised will be used for operational modernization of the company’s mining operations at Pavlogradugol and Komsomolets Donbassa through sourcing world class mining equipment from Germany and Czech Republic. They will also be used in refinancing of more expensive short term domestic loans and for business expansion purposes.
 
Obtaining such a financial facility is the first step for DTEK to enter international capital markets. Starting our credit history from this small loan the company has a potential to bring down interest rates, increase volume of financing from external markets, and to further switch to more sophisticated forms of international financing. All of this will allow the company to successfully finance the declared growth strategy. Besides, the possibility to carry out public transactions is a kind of company’s certificate of conformity to the world standards.