The Black Sea Trade and Development Bank (BSTDB) and the vertically integrated group of mining and metallurgical companies Metinvest have announced the signing of a loan agreement in the amount of EUR 62 million to finance and refinance the purchase of machinery and equipment for its iron ore enterprises (GOK).
“The seven-year credit facility was granted with a two-year grace period for principal repayment,” the group said in a press release.
“This news marks the culmination of significant efforts since July and is an important milestone in our history, as the facility is our first from an international financial institution. At Metinvest, we share the values of BSTDB and intend to use this financing to make our business more efficient, as well as to increase our overall contribution towards the Black Sea region’s economic wellbeing,” Yuriy Ryzhenkov, the Chief Executive Officer of Metinvest, said.
“Working with an international financial institution has been a highly positive new experience for Metinvest. I would like to express my gratitude to the BSTDB team for their continued support throughout the process and for helping to make this transaction happen. We are proud of this new partnership and are eager to develop it further,” Alexander Lyubarev, the Director of Corporate Finance and Treasury at Metinvest, reported.
“We are happy to assist Metinvest, a leading manufacturer and employer in Ukraine, in implementing its development and capital expenditure program focused on improved production technology, efficiency and environmental impact. Given the importance of this sector to the country and its export potential, this operation will have an important developmental impact in Ukraine. As a regional development bank, we welcome that the group plans to buy new equipment from and export its products to other BSTDB member countries, thus strengthening the regional cooperation,” BSTDB President Dmitry Pankin noted.
Metinvest B.V. (the Netherlands), the parent company of the Metinvest mining and metallurgical group, in January-September 2020 reduced capital investments by 40% compared to the same period in 2019 – to $460 million.
Investment cuts were planned, according to Thursday’s preliminary unaudited interim financial results for the nine months of 2020.
“In line with the Group’s 2020 CAPEX priorities for critical asset maintenance and the completion of ongoing strategic investment projects, investments in maintenance and repairs decreased by 39%, while investments in strategic projects were reduced by 43%, which brought their share in the total volume of capital investments to 67% and 33%, respectively, in January-September 2020 (65% and 35% in the nine months of 2019),” the report says.
At the same time, it is noted that Metinvest has made progress in the following key strategic projects: modernization of the 1700 mill at the Mariupol-based Illich Iron and Steel Works (equipment tests are ongoing; a new coiler was installed and the production of the first coils was carried out in November 2020); construction of an air separation unit at the Illich plant; modernization of concentrating equipment at Central Mining and Processing Plant (MPP) (completed in March 2020); construction of a cyclic-flow technology at the Northern MPP (the second stage for transporting rocks) and Inhulets Mining (InGOK, Kryvyi Rih, Dnipropetrovsk region) (Skhidny tract); and completion of the first stage of modernization of the OK-306 roasting machine at Pivnichny MPP.
“A special priority in 2020 is given to the environmental agenda, in which the main current project is the reconstruction of the sinter plant at the Illich plant, which is expected to be completed next year. Many other initiatives have also advanced this year, including the reconstruction of the gas treatment facilities of the casting yard and the bunker rack of blast furnaces. No. 3 at the Illich plant (completed in March 2020) and converters No. 1 and No. 2 at the Azovstal Iron and Steel Works (basic and detailed engineering and technical documentation is being developed),” the document says.
Metinvest B.V.’s revenue (the Netherlands), the parent company of the Metinvest mining and metallurgical group, in September 2020 increased by 8.8%, or $74 million, compared to the previous month – to $912 million from $838 million.
According to the published preliminary unaudited consolidated monthly results of the company’s financial statements on Thursday, the total EBITDA in September amounted to $244 million, which is $28 million higher than in August ($216 million), while EBITDA from participation in the joint venture was $37 million (in August – $48 million).
According to the report, the adjusted EBITDA of the metallurgical division of the group for September 2020 amounted to “plus” $115 million (in August, “plus” $91 million), including $1 million from participation in the joint venture ($7 million); EBITDA of the mining division – $134 million (in August – $134 million), including from the joint venture – $36 million ($41 million). The management company spent $4 million ($6 million).
Total revenue in September consisted of $727 million ($671 million in August) for the Metallurgical Division, $235 million ($258 million) for the mining division, and intragroup sales of $50 million ($91 million).
The total debt of the company in September decreased by$ 90 million compared to August – to $2.927 billion from $3.017 billion, while the volume of funds increased by $126 million – to $649 million from $523 million.
Funds used in investment activities amounted to $65 million, in financial activities – $94 million.
Central Mining and Processing Plant (Central GOK, Kryvy Rih, Dnipropetrovsk region), a member of Metinvest Group, in January-October of this year, according to recent data, reduced the production of pellets by 2% compared to the same period last year – up to 1.86 million tonnes.
As the Interfax-Ukraine agency was informed in the company, 76,000 tonnes of pellets were produced in October, while in September – 202,500 tonnes.
For the ten months of 2020, the production of iron ore concentrate increased by 10.3% compared to the same period in 2019, up to 4.079 million tonnes, including 443,970 tonnes produced in October (in September – 399,520 tonnes).
“The reason for the decrease in production of pellets in October compared to the previous month is the autumn repairs at the pelletizing plant – the work was carried out for 21 days,” the company reported.
As reported, Central GOK in 2019 increased the production of pellets by 4.3% compared to the previous year, to 2.402 million tonnes, iron ore concentrate, by 0.5%, to 4.436 million tonnes.
Central GOK is one of the five largest producers of mining raw materials in Ukraine. It specializes in extraction and production of iron ore raw materials – concentrate with an iron content of 65% and 68.2%, as well as pellets with an iron content of 63.9%
Cyprus-based Barlenco Ltd., affiliated with the largest Ukrainian mining and metallurgical group Metinvest, in accordance with the law on joint stock companies has confirmed its intention to exercise the right to compulsory redemption of shares (squeeze-out) from minority shareholders of PrJSC Dniprovsky Coke Chemical Plant (formerly Evraz-Dniprodzerzhynsk Coke and Chemical Plant, Kamianske, formerly Dniprodzerzhynsk, Dnipropetrovsk region)
According to the official data of the plant in the information disclosure system of the National Securities and the Stock Market Commission, Dniprovsky Coke Chemical Plant received a notification from the shareholders on November 18 of this year.
As reported, PrJSC Dniprovsky Coke Chemical Plant received a notification from Metinvest B.V. on the achievement of a dominant controlling stake in the enterprise on October 21 of this year. Then it was clarified that the direct share of Metinvest B.V. increased from 73.37% (500.623 million shares) to 97.01%. At the same time, the aggregate ownership of shares in Dniprovsky Coke Chemical Plant by Metinvest (with the affiliated company Barlenco Ltd (Cyprus), which owns another 2.09% of the company’s shares) reached 99.1%. price of UAH 1.62 per ordinary share.
As reported, Metinvest B.V. in April 2019 announced a proposal to buy back shares from minority shareholders of Dniprovsky Coke Chemical Plant as part of the sell-out procedure (buyback at the request of the minority shareholder based on Articles 68 and 69 of the law on joint stock companies).Metinvest B.V. in mid-March 2020, announced the completion of the transaction to acquire a stake in PrJSC Dniprovsky Coke Chemical Plant and currently owns about 73% of the company’s shares. Back in 2014, Metinvest Group sent an application to the Antimonopoly Committee of Ukraine to acquire a controlling stake in Dniprovsky Coke Chemical Plant. About a year ago, the AMCU approved this deal subject to a number of restrictions. Prior to this, Metinvest received a number of permits from the antimonopoly authorities of other countries to acquire this enterprise.
The charter capital of the plant is UAH 170.584 million.
Bonds of Metinvest B.V. (Netherlands), the parent company of the Metinvest mining and metals group, due in 2027, is included in in the JPMorgan Corporate Emerging Markets Bond Index (CEMBI) series.
According to the company’s press release issued on Wednesday, the CEMBI indices provide a global benchmark tracking U.S.-dollar-denominated debt issued by emerging market corporations.
At the same time, the eurobond due in 2027 was issued on October 1, 2020 following the successful completion of a liability management exercise to extend the maturity of the group’s outstanding eurobonds. It met the criteria to be included in the CEMBI Broad and CEMBI Broad Diversified high-yield indices after a regular review on October 30, 2020. As a result, Metinvest’s U.S.-dollar-denominated eurobonds are all included in these two indices for the high-yield segment.
In addition, the eurobond due in 2029, which was issued on 17 October 2019, has effectively replaced the eurobond due in 2023 in the CEMBI and CEMBI Diversified high-yield indices after the size of the latter decreased to below $500 million.
