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$65 million loan to Russian potash producer for export terminal
EBRD loan includes $30.5 mln syndication arranged by RZB-Austria and WestLB
A four-year, $65 million loan from the European Bank for Reconstruction and
Development will allow Russia’s biggest producer of potassium fertilizers to
acquire full control of the maritime terminal through which the company ships
the bulk of its sea-bound exports.
The EBRD remains lender of record for the full amount, but $30.5 million has
been syndicated to three commercial banks and one fund management firm under
an EBRD A/B loan structure, with Raiffeisen Zentralbank Österreich AG
(RZB-Austria) and WestLB acting as arrangers and taking $10 million each. A
further $5.5 million was syndicated to Cordiant and the remaining $5 million
to Raiffeisenlandesbank Niederösterreich-Wien.
Cordiant, formerly International Finance Participation Trust Management Inc.,
is a fund management firm specializing in private-sector investments in
emerging markets.
The four-year loan will enable Uralkaly to establish full ownership over the
Baltic Bulk Terminal, a state-of- the-art transshipment and storage facility
for mineral fertilizers near St Petersburg whose construction was aimed at
cutting the Company’s transportation costs. The terminal, which will have a
capacity of 5.5 million tonnes, is nearing completion.
The proposed consolidation of the Baltic Bulk Terminal by Uralkaly will
enhance its ability to provide a high-quality service to international
customers, said Victor Pastor, Director of the EBRD’s Russia team.
This is the EBRD’s second loan to Uralkaly. In 2003, the Bank made a
seven-year loan of $75 million to finance acquisition of the company’s own
power generators, specialised railcars to transport potassium fertilizer and
mining equipment, $50 million of which was syndicated to five commercial banks.
Uralkaly is located in the city of Berezniki, some 1,200 km to the east of
Moscow in the northern Urals. It is the world’s fourth largest producer of
potash and operates three mines and four potassium rock enrichment facilities,
employing in all 16,000 people.
The company exports some 85 per cent of its production, mainly to China, India
and Brazil. The growing demand for fertilizers, particularly in China and
India where they are needed for the cultivation of soya, is one of the main
forces driving the international market for potash.
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