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Eighteen banks join EBRD loan syndicate for RAO Gazprom pipeline reconstruction
The European Bank for Reconstruction and Development (EBRD)'s largest
syndicated loan in Russia has met with such a huge response from commercial
banks, that the EBRD plans to increase the loan from US$ 225 million (ECU 200
million) to US$ 300 million (ECU 265 million), of which it will fund US$ 100
million (ECU 88 million). The EBRD's loan to RAO Gazprom will finance priority
reconstruction investments in Gazprom's unified gas supply and pipeline system.
Regarding the syndication, which was substantially oversubscribed, Noreen
Doyle, Deputy Vice President of Finance at the EBRD, said: "The success is
beyond our expectations. When the EBRD started working with Gazprom two years
ago, unsecured lending to Russian companies, even to Gazprom, was
non-existent. The success of the syndication is as much a reflection of the
advances made by Gazprom's management in terms of financial information and
transparency as it is of the increased interest in the Russian market."
Alexander Nemoudrov, Deputy Head of the Prospective Development Department of
RAO Gazprom, stated: "The EBRD has again proven that it is a pioneer and a
catalyst. We would not have been able to source this amount of funding from
the market without its presence. This market interest bodes well for our
future access to corporate loans and the capital markets."
Eighteen major international banks from 11 countries are participating in the
loan. Some of the banks will be working with Gazprom for the first time. The
syndication, which is the culmination of three years' work with Gazprom by the
EBRD, was launched earlier this year and signed this week.
In April 1993, the EBRD financed a two-year major study on the reconstruction
of Gazprom's Unified Gas Supply System which established a strong foundation
for financing key projects and programmes between the two institutions.
The loan proceeds will fund a pipeline inspection programme, improved metering
at trunkline stations, mobile compressor stations and the replacement of block
and control valves. The financing will also help introduce key environmental
instrumentation and management support, and will encompass feasibility studies
to prepare for further high priority reconstruction investments. These have
been carefully chosen because of their critical importance to the efficiency
of the overall pipeline operations and to the reliability of gas supply.
Commercial banks participating in the RAO Gazprom syndication:
ABN Amro JP Morgan
Bank of America NatWest
BFCE SBC Warburg
CIBC SocGen
Citibank Vereinsbank
Creditanstalt Chase
Credit Lyonnais Dresdner
Den Norske Bank IBJ
DKB Sumitomo
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