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EBRD's first deal in Ukrainian steel sector
ISTIL Ukraine, country's first privatised steel mill, receives US$ 25 million credit
A US$ 25 million revolving credit line from the European Bank for Reconstruction and Development should help Ukraine's first privatised steel mill increase sales, including exports, and further improve the quality of its specialised steel products. The deal is the EBRD's first in Ukraine's metallurgical sector, which accounts for about a quarter of the country's economy.
The borrower, ISTIL Ukraine, is the only modern mini steel mill in the country, converting scrap metal into high quality billets and bars for seamless pipes, railroad axles, automotive components and other engineering applications.
Noreen Doyle, the EBRD's First Vice President, said the deal provides much-needed working capital financing to an important Ukrainian manufacturer. "ISTIL Ukraine is an important example of a heavy industrial enterprise which has been privatised with the participation of an international investor. What's more, this financing sets an important precedent for the sector and should encourage foreign and local banks to provide medium-term working capital to strong Ukrainian companies," she added.
Mohammad Zahoor, Chairman of ISTIL Ukraine's owner, International Steel & Tube Industries Ltd., said: "This loan from the EBRD represents a vote of confidence not only in ISTIL Ukraine, but for the Ukrainian government's important decision to embark on the privatisation of the Ukrainian steel industry in 1996. We believe that this policy will promote increased foreign investment in the steel industry". ISTIL Ltd. is investing nearly US$ 100 million of its own funds in the project. "We see the EBRD's participation as a major breakthrough for our company and the Ukrainian metallurgical industry as a whole," said Alexander Ryzhenkov, President of ISTIL Ukraine. "This is a very important sector for Ukraine, and access to international capital markets is essential for its prosperous future."
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