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EBRD takes US$ 50 million equity stake in Slovnaft
The European Bank for Reconstruction and Development (EBRD) has made a US$ 59 million (ECU 44.3 million) equity investment in Slovnaft, the principal oil refining and marketing company of the Slovak Republic, representing a 10.5 per cent capital interest in the company.
Ron Freeman, First Vice President of the EBRD, said: “This is the EBRD's second direct financing with Slovnaft and indicates our support of the company and its strong management team. The strong demand shown by Slovak and Czech institutional investors for blocks of shares shows that equity is beginning to be made available in central European markets for major regional companies with strong fundamentals and an attractive profit potential. Completion of the offering represents an important milestone towards the continuing privatisation of a leading Slovak company”.
Following approval by its Board of Directors on 14 December 1994, the EBRD has made its investment in Slovnaft by participating in the company’s new offering of 3.3 million shares in the form of Global Deposit Receipts (GDR), which represents a 20 per cent capital interest in the company. Proceeds of the share offering will be used to purchase and install a heavy petroleum residuals upgrading complex at Slovnaft’s Bratislava refinery.
A major portion of the GDR offering was taken up by the Slovak and Czech markets. Participants in this portion included, among others, Slovenska Sporitelna, Ceskoslovenska Obchodni Banka, Vseobecna Uverova Banka, Istrobanka, Polnohospodarska Banka and Transpetrol, with Slovenska Sporitelna acting as manager for the Slovak and Czech market. The international portion was managed by PaineWebber International.
Slovnaft processes crude oil into a broad range of petroleum products, plastics and petrochemicals, and markets, transports, distributes and exports these products. Based on 1994 results, net sales totalled US$ 1.0 billion (ECU 750 million), of which approximately half was derived within the Slovak Republic and half from exports.
On 8 December 1994, the EBRD made a US$ 30 million long-term loan to Slovnaft to upgrade and modernise its retail service station network.
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