EVRAZ Group S.A. Will Increase Borrowing By 950 Million Dollars

27.10.2009 — News

EVRAZ Group S.A. has increased its credit burden. Gazprombank is providing credit lines for the sum total of 950 million US dollars for Evraz companies for the period of 45 months.

The holding informed RusBusinessNews that OJSC West Siberian Iron and Steel Plant will receive 500 million dollars, OJSC Nizhniy Tagil Iron and Steel Works - 300 million dollars, OJSC Novokuznetsk Iron and Steel Plant - 150 million dollars.

According to experts the borrowed resources are necessary for topping up the working assets and the restructuring of debts. In the first half of 2009 Evraz's borrowing has grown more than 4 times - from 1.504 to 8.482 billion dollars. The short term borrowing amounts to almost 4 billion dollars. The holding's main creditors are Deutsche Bank, Vnesheconombank, and VTB. The company's receipts traded on London Stock Exchange went 0.91% down after the new borrowing has been announced.

January-June 2009 brought Evraz the net loss of 999 million dollars according to IFRS in comparison to 2 billion net profit in the first half of the previous year. The revenues in the reporting period have decreased 2.3 times from 10.72 billion dollars to 4.64 billion. Moody's Investors Service has lowered the corporate family rating for Evraz Group from "Ba3" down to "B1". The outlook for the rating is "negative".

The reduction of steel production at the Evraz Group plants in comparison to 2008 in the third quarter has slowed down from 28 to 13.2% (4.2 million tons), rolled metal - from 24 to 14.4 % (3.8 million tons), pig iron - from 30 to 16.4% (3 million tons). Evraz's Russian plants alone have made redundant 900 staff in the first half of the year, and more than 15,000 staff have been made to work short hours.

EVRAZ Group S.A. is one of the world's largest vertically integrated steel and mining companies. Its assets are located in Russia, Ukraine, Europe, USA, Canada, and South Africa. In 2008 Evraz produced 17.7 million tons of steel and took 15th position amongst the world's metal makers in terms of production volumes.