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MMK Signs Credit Facility Agreement with Sberbank
12/31/2008 - Savings Bank of the Russian Federation and OAO Magnitogorsk Iron & Steel Works enter nonrenewable 2-year credit facility for RUB 3.0bn to finance construction of MMK’s Plate Mill 5000 complex.
Sberbank (Savings Bank of the Russian Federation) and OAO Magnitogorsk Iron & Steel Works (MMK) have entered a nonrenewable 2-year credit facility for RUB 3.0bn. The deal was signed by Sberbank Chairman of the Board and CEO Herman Gref and MMK Chairman of the Board of Directors Victor Rashnikov.
The credit facility is being provided to finance construction of MMK’s Plate Mill 5000 complex, which will have a design capacity of 1.5 million tonnes of plates per year. The plates are intended for production of pipes, building of ships, vessels and bridges.
Implementation of the plate mill complex is expected to significantly strengthen MMK’s general operational efficiency. It will help to facilitate state-of-the-art production of high quality plates meeting international standards, making the capable of competing successfully both in the domestic and export markets. Sberbank also considers the credit line for MMK as another major step toward effective support of Russian strategic enterprises.
Sberbank (Savings Bank of the Russian Federation) is the largest Bank in Russia, Central and Eastern Europe, with about 30% of the total assets of the Russian banking system. It is the major banking institution extending credits to the national economy. Sberbank’s founder and majority shareholder, The Central Bank of the Russian Federation, holds over 60% of the voting shares, with the remaining shares dispersed among more than 200,000 individuals and legal entities. The Bank has the most ramified branch network in Russia, with 17 Regional Head Offices and over 20,000 branches and banking outlets, as well as subsidiaries in Kazakhstan and Ukraine.
The Magnitogorsk Iron and Steel Works OJSC (MMK) is among the world’s largest steel producers and is one of the leaders of Russia’s steel industry. The company comprises 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 value added goods. In 2007 the company produced 13.3 million tonnes of crude steel, and 12.2 million tonnes of commercial products. US GAAP sales stood at USD 8.2 billion, with net income at USD 1.8 billion.
