EBRD and Coal Energy Signed USD 70 Million Binding Financing Agreement
OREANDA-NEWS. January 10, 2013. European Bank for Reconstruction and Development (EBRD) will provide USD 70 million loan to Coal Energy, the private producer of thermal and coking coal in Ukraine. The loan agreement was signed in Kiev. Investment bank Dragon Capital acted as a sole financial advisor for Coal Energy in this transaction.
The credit facility is composed of two subsequent tranches. Installments of the first tranche of the loan will be used to support the development of the waste dump processing and coal beneficiation businesses, as well as to finance working capital requirements. The second tranche will finance mechanisation of CwAL LE “Sh/U Blagoveshenskoe”, further development of its waste dump processing business as well as energy efficiency and environmental health & safety measures at priority mines of Coal Energy.
Interest rate for the 7-year loan with the availability period of 3 years is Libor (6 months) + 5.85% p.a.
“The raising of financing from EBRD - is the next step of the Group’s long-term strategy, aimed at increasing operating efficiency of production and growth of our business. Our joint projects carried out with EBRD on underground coal mining and coal beneficiation will allow the Group to reduce costs, including financial costs, and increase production of thermal coal which will meet increasing demand from the energy sector. We appreciate our cooperation with the reputable international financial institution and trust to our business and its prospects in Ukraine” – said Viktor Vyshnevetskyy, Chairman of the Board of Directors of Coal Energy.
“The project’s success indicates that despite the difficult capital market environment, private companies such as Coal Energy retain the real possibility to raise financing on favorable terms. I believe that this project will not only contribute to the further development of Coal Energy, but also will give clear signal to investors into Ukrainian coal industry” – said Michael Granchak, Investment Banking Director of Dragon Capital.
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