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Hungarian oil and gas company closes its first international loan syndication through EBRD
The European Bank for Reconstruction and Development (EBRD), with five international commercial banks, today signed a US$ 55 million loan to MOL Magyar Olaj-és Gázipari Rt., a Hungarian integrated oil and gas company. This loan is being provided pursuant to the facility agreement previously signed between the EBRD and MOL on 30 December 1994.
Peter Reiniger, Director of the Country Team for Hungary, said: "The EBRD is extremely pleased to have introduced MOL to the international financial markets and helped achieve its first syndication. More financings are likely to follow to fund MOL's continuing development programme. Demand has been strong to participate in the syndication, which has been on a purely commercial basis without state guarantees or other government credit protection. The EBRD is encouraged by the enthusiasm of commercial banks to commit long-term financing to MOL, which is planned for privatisation in the near future."
György Szabó, Chief Executive Officer of MOL, said: "We are most delighted with this successful syndication which marks the start of MOL's entry in the international banking market. It has opened MOL to important financing sources at a time when we look towards privatisation and continuing development of our capabilities."
The EBRD is providing US$ 25 million and the commercial banks are providing US$ 30 million.
The five banks in the syndicate are: BHF-Bank, Germany; Creditanstalt, Austria; ING Bank, Netherlands; Sumitomo Bank, Japan; and WestLB, Germany. This is the first time a Japanese bank has participated in an EBRD syndication.
The proceeds of the loan are being used to finance the construction and start up costs of an up-to-date underground natural gas storage facility at the Zsana natural gas field in south-eastern Hungary. Zsana is a priority capital investment for MOL and an important tool for a balanced natural gas supply, helping to meet demand during the winter peak periods.
The total loan of US$ 55 million represents approximately 72 per cent of the total capital cost of the Zsana construction. The remainder of the cost is being financed by the World Bank under an existing loan facility approved in 1989.
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