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Loan syndication arranged by EBRD and Crédit Lyonnais for Slovak aluminium producer
The European Bank for Reconstruction and Development (EBRD) and Crédit Lyonnais have finalised a US$ 126 million (ECU 109 million) co-financing facility for Slovalco a.s., an aluminium producer based in Ziar nad Hronom in the Slovak Republic. Maturing in 2003, the facility was jointly arranged by the EBRD, which is also the lender of record, and Crédit Lyonnais, with financing syndicated to participating banks.
The EBRD and Crédit Lyonnais were joined by Dresdner Kleinwort Benson, NM Rothschild & Sons Limited and Société Générale as co-arrangers, and Raiffeisen Zentralbank Österreich AG as senior lead manager. The syndication was substantially over-subscribed and includes Paribas, Den norske Bank, Erste Bank, ING Barings and The Chase Manhattan Bank as lead managers.
"The participating banks are of the highest quality, which is a reflection of Slovalco’s strong foreign revenues and the strength of its management and corporate governance," said Noreen Doyle, EBRD Deputy Vice President, Finance. "This is a clear demonstration that in spite of the current financial turbulence in emerging markets, opportunities still exist for strong projects in central and eastern Europe. Furthermore, the success of the syndication illustrates the clear desire among foreign lenders to continue to support long-term investment in the region, especially in association with international financial institutions such as the EBRD."
Chris Mason, CEO of Crédit Lyonnais Metals & Mining, added: "Slovalco has successfully placed a five-year facility at a yield substantially below that available on Slovak government bonds. This is all the more remarkable in such difficult market conditions at a time when confidence in the metals sector has deteriorated and prices are at all-time lows. The company has developed an effective hedging programme and has become a world-class operation."
Slovalco is owned by Zavod Slovenskeho Narodneho Povstania (ZSNP), the recently privatised Slovak aluminium company, the EBRD and Hydro Aluminium, a subsidiary of Norsk Hydro and one of the largest integrated aluminium producers in Europe. It was created to take over and complete the construction of a primary aluminium smelter and ancillary facilities and to operate the new smelter with modern operating and financial practices. In 1994 the EBRD extended to Slovalco a term loan of US$ 110 million to enable the company to complete construction of the smelter. This was achieved in May 1995 and the smelter has been fully operational since December 1995.
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