Evraz Secures $610 Million Loan Amid Volatile Market Conditions
December 28 2011 - 10:48AM
Dow Jones News
Russian steelmaker Evraz PLC (EVR.LN) said Wednesday it secured
a $610 million five-year revolving credit facility to refinance its
debt and meet other corporate needs, amid the volatile credit and
commodities markets.
Evraz, which is set to repay less than $250 million in debt next
year, is not expected to have any problems with its lenders,
UralSib analyst Dmitry Smolin said. The steelmaker had a
comfortable 2.1 ratio of its net debt to the last 12-months
earnings before interest, tax, depreciation and amortization, or
Ebitda, as of June 30, with net debt of $6.04 billion.
However, as metal prices continue softening, some
highly-leveraged Russian companies may start facing difficulties
soon.
"Russian metal companies have never fully recovered from the
previous financial crisis--their debt has been refinanced but
hasn't been paid out, while the metal prices have never reached the
pre-crisis levels," Smolin said. "And now, that the prices are
falling, some have found themselves in a difficult situation."
Aluminum maker United Co. Rusal (0486.HK), whose debt stands at
$11.4 billion, said on Dec.15 it has started to negotiate "a more
flexible approach to the calculation of covenants" with its lenders
due to the "possible continuing weakness of global commodity
markets over the next 12 months." LME three-month aluminum has
fallen by 19% since Sept. 1 and was trading at $2,005 at 1404GMT
Wednesday.
Coal and steel group OAO Mechel (MTL), whose total debt stood at
$9.5 billion as of Sep.30 warned on Dec.15 it may break its debt
covenant at the end of the year, as coal and steel prices continue
to soften.
-By Nadia Popova, Dow Jones Newswires, +7 495 232 198;
nadia.popova@dowjones.com
(Rhiannon Hoyle in London contributed to this report.)