EBRD leads $250 million financing for Russian oil services firm

By Richard Wallis

The EBRD has raised $250 million in long-term funding for Russian oilfield services provider Integra Group in order to restructure its balance sheet. Despite a deepening financial crisis, the EBRD has managed to syndicate a large part of the loan to eight international and local commercial banks.

“This transaction marks a major success, setting an important benchmark for Russian borrowers and underlining the importance of the EBRD in helping the real sector of the economy overcome the crisis”, said the EBRD’s First Vice President, Varel Freeman.

“The EBRD loan radically changes our debt profile, making it predominantly long-term; it refinances significant investments that Integra had made in the past and provides a comprehensive long term capital solution for its continued development”, said Integra’s Chief Financial Officer, Dmitry Avdeev.

The strong support from existing and new lenders serves as evidence of the strength of our business model in the current challenging market environment, Mr. Avdeev added.

The European Bank for Reconstruction and Development is the arranger and lender of record for the full $250 million and is keeping $75 million of this amount on its own books as a five-year “A” loan.

The remaining $175 million has been syndicated as a “B” loan with a three-year maturity to a group of commercial banks led by BNP Paribas (Suisse) S.A. and ING Wholesale Banking, as Coordinating Mandated Lead Arrangers.

Other banks taking part in the “B” loan syndication include: VTB Bank (Deutschland) AG, ABN AMRO Bank N.V., OJSC “Alfa-Bank”, Commerzbank Aktiengesellschaft, Morgan Stanley Bank N.A. and Aljba Alliance CB Ltd. Of the banks participating in the B Loan, six had taken part in an earlier loan to the group which the EBRD loan is re-financing, but two are new lenders, Alfa Bank and Aljba Alliance.

The borrower is IG Holdings Limited. This Cyprus-registered entity is wholly owned by the Integra Group and controls most of the group’s assets.

Apart from restructuring Integra’s balance sheet, the loan will allow the group to buy new equipment and help it launch an energy efficiency programme aimed at achieving energy savings of up to 10 percent at two of its key subsidiaries this year. Integra is also to implement an EBRD-agreed environmental action plan by 2010.

Integra, founded in 2004, is listed on the London Stock Exchange and operates in Russia and other CIS countries. It is a leading Russian independent provider of onshore oilfield services and is also the largest manufacturer in the Russian Federation of heavy drilling rigs, cementing equipment and certain specialized equipment used in the exploration, development and production of oil and gas. The company’s customer base includes major Russian and international oil and gas companies operating in Russia and CIS.