OREANDA-NEWS. July 16, 2010. MHP (LSE: MHPC LI) signed a loan agreement with the European Bank for Reconstruction and Development, according to a press release issues yesterday. Under the agreement, the EBRD will provide a USD 35 mln working capital loan and USD 15 mln to be directed at increasing energy efficiency. The EBRD’s board approved the loan at a meeting on May 6.

Concorde Capital: given the company’s cash rich position, estimated at ~USD 350 mln as of 2Q10, we see the loan having a neutral effect on operations. We estimate MHP’s current total debt at USD 946 mln and forecast an 18-20% decline by year-end to USD 730-780 mln, reflecting the maturity of MHP’s debt. This implies a net debt/EBITDA ratio of 2.21x for 2010E vs. the 2.5x threshold specified in the company’s latest USD 330 mln Eurobond issue covenants, hence this should not have an adverse affect on MHP’s borrowing abilities.