Alchevsk Steel draws 83% of loan limit from parent

Обзоры по компаниям и отраслям 08.06.2012 Alchevsk Iron & Steel (ALMK UK) received USD 227 mln in debt financing from Cyprus company Margit Holding Limited in early June, Interfax reported yesterday. This brings total exposure of Margit into Alchevsk debt to USD 720 mln, or 83% of the limit under the five-year unsecured credit line (USD 865 mln). The five-year credit agreement with Alchevsk Iron & Steel was signed in December 2011 at an interest rate of 5.125%. Roman Topolyuk: The low-cost debt financing from Margit, which we presume is affiliated with Alchevsk Steel’s parent, will improve working capital management of Alchevsk in the sluggish steel market. Secondly, the company had USD 443 mln in the current portion of long-term debt as of end-March 2012 and we believe funds received under this credit line will be partially spent to refinance these liabilities. Moreover, Alchevsk Steel has approved USD 215 mln in CapEx for 2012, and should now have sufficient financing available to meet this target.