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European Bank signs loan agreement for Polish-Italian joint venture
The European Bank for Reconstruction and Development today signed an ECU 30 million loan agreement with Huta Warszawa-Lucchini, a joint venture company, formed between the Italian Lucchini Group and Huta Warszawa, the largest Polish producer of wholly scrap-based engineering steels. A group of Italian banks, supported by the Italian Export Agency, SACE, guarantees, will also be providing substantial loans for the project and the International Finance Corporation (IFC) has announced a loan and equity stake in the joint venture.
Ron Freeman, First Vice President for Merchant Banking, said, "Without the presence of international institutions, like the European Bank and the IFC, this project would not have been financed. It is a great example of how an international consortium, consisting of private finance entities, can collaborate."
He continued, "This loan will assist the company to become a high quality, low cost steel supplier for Polish industry. Lucchini's strong track record in restructuring older steel plants is bringing enormous benefits to Huta-Warszawa and its customers."
The project involves restructuring an outdated plant, which has also been responsible for significant toxic emissions in the Warsaw region, and installing a modern and environmentally sound steel-making and rolling plant. Total capital expenditure for new equipment is approximately ECU 150 million out of a total project value of ECU 240 million, which makes it one of the largest private sector investments in Poland.
Lucchini is a medium-sized Italian company which is among the most advanced and efficient privately owned producers in Europe
The Polish partners include: Huta SA, a company controlled by the Polish Treasury in which workers have a 20% stake; the Industrial Development Agency; the Polish Development Bank; and various Polish creditor banks to Huta Warszawa. SIMEST, the Italian government agency which supports joint-ventures in developing countries, is also a partner in the project.
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