Mandated lead arrangers Commerzbank, ING, Natixis, Société Générale and Banque Société Générale Vostok (BSGV) have closed a US$180mn trade-related facility for ZAO Profit in Russia.
The borrower is the biggest Russian scrap collecting and processing company, and a strategic supplier of ferrous scrap to Magnitogorsk Iron and Steel Works (MMK). The funds will be used to refinance its existing indebtedness as well as to finance its general corporate needs. It is the largest deal to date in the ferrous scrap industry in Russia and the CIS.
The deal has been structured as a club deal between the four banks, and has a one-year tenor with two one-year extension options. Gide Loyrette Nouel acted as legal counsel for the lenders.
Borrower obligations under the facility are supported by a suretyship granted by MMK, and withdrawal agreements on the accounts of the borrower and the surety, together with the domiciliation obligations of the obligors.
MMK is one of the largest steel producers in the world, and its operations encompass the entire production chain, from preparation of the iron ore to the downstream processing of rolled steel. In 2007, the company produced 13.3mn tonnes of crude steel, and 12.2mn tonnes of commercial products.