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MMK Atakas Closes Financing for Integrated Flat Steel Facility

11/20/2009 - MMK Atakas has closed the long-term financing for the construction of its integrated flat steel making complex and related infrastructure facilities in Turkey. Designed annual capacity of the project is 2.3 million tonnes of flat steel products.

MMK Atakas has closed the long-term financing for the construction of its integrated flat steel making complex and related infrastructure facilities in Turkey.
 
Designed annual capacity of the project is 2.3 million tonnes of flat steel products for sale in domestic and export markets. The project began in October 2007 and is expected to be completed by the end of December 2010.
 
The financing package comprises:
 
  • A €384 million SACE-backed export credit facility, arranged by BNP Paribas, SACE, and The Royal Bank of Scotland and insured by SACE to finance the main supply contract with Danieli & C. Officine Meccaniche SpA along with associated financing costs
  • A USD 450 million commercial facility arranged by Türkiye Garanti Bankası A.Ş. (62%) and Türkiye Is Bankası A.Ş. (38%), together with a USD 60 million working capital facility arranged by Türkiye Garanti Bankası A.Ş. (50%) and Türkiye Is Bankası A.Ş. (50%), for the financing of other capital expenditures and project costs.
 
Construction is on schedule, according to MMK Atakas, despite the global downturn in the steel industry and difficulties in raising financial resources. Sponsors of the project—OJSC MMK (Russia) and Atakaş Group (Turkey)—committed all necessary resources and efforts to achieve the project’s goals, the company says.
 
A comprehensive Environmental and Social Impact Assessment has been conducted in accordance with IFC/World Bank standards and under the supervision of SACE.
 
Clifford Chance Europe LLP and Pekin & Pekin acted as the finance parties’ legal advisors; Norton Rose and Hergüner Bilgen Özeke provided legal support to MMK Atakas and the sponsors.
 
MMK Atakas is a Turkish company jointly owned by OJSC MMK and Atakaş Group that was established in 2007 for engineering, constructing, and operating of an integrated flat steel making complex with annual production capacity of 2.3 million tonnes of finished flat steel products located at two sites in Iskenderun and Kocaeli (Gebze).
 
OJSC MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added goods. In 2008, the company produced 12 million tonnes of crude steel and 11 million tonnes of commercial products. MMK Group revenues in 2008 stood at USD 10.55 billion.
 
Atakaş Group is the biggest coal importing group in Turkey and is mainly involved in imported coal-related activities. The group also owns sieving and packing facilities in İskenderun, Marmara, and Black Sea regions with the total annual capacity of 2 million tonnes. The group’s assets also include two factories for production of pressed coal in accordance with best European standards with the annual capacity of 500,000 tonnes located in Turkey at two sites in Iskenderun (Payas) and Kocaeli (Gebze).