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OJSC Mikhailovskiy GOK, Russia (MGOK) has signed a medium-term US$200mn structured pre-export finance facility with banks. Syndication will follow.
Mandated lead arrangers are BNP Paribas and Commerzbank, while BNP Paribas and Commerzbank (Eurasija) SAO, Moscow (also passport bank) have fully underwritten the deal.
This is the first time that MGOK has sought to raise finance from the international syndicated loan market. Funds will be used to finance acquisitions and to refinance existing indebtedness.
The exporter and guarantor is Torbeg Trading Limited, Cyprus.
The facility agent is BNP Paribas SA (Paris), while BNP Paribas (Suisse) SA, Geneva is security agent.
The final maturity date is 37 months from the disbursement date.
Repayments involve 31 monthly instalments after a six-month grace period.
MGOK is considered to be the second largest Russian iron ore producer. It mines quality ore deposits within the Kursk Magnetic Anomaly, Russia’s main iron ore basin in Kursk region, Orlovsk region and Belgorodsk region. The company has been ramping up production from 2002-04 in a very favourable pricing and strong demand environment.
In 2004, it processed 19.2mn tonnes of ore compared to 15.1mn tonnes in 2003, with an output of 4,709 thousand tons of concentrate and 8,806 thousand tonnes of pellets.