The proposed project includes:
a) an increase of operating working capital to meet the growing demand for larger shipments of steel products by ISTIL (Ukraine)’s clients, and
b) capital expenditures during 2004 and 2005 aimed at increasing ISTIL (Ukraine)’s competitiveness through production and energy efficiency improvements.
EBRD will finance part of ISTIL (Ukraine)’s capital expenditures and working capital increase.
Although a small steel producer in volume terms, ISTIL (Ukraine) is one of the few producers in Ukraine that uses modern production technology based on electric arc furnace and continuous casting process for a range of steel products. The Bank’s financing would assist ISTIL in implementing its strategy of improving its competitiveness through the introduction of energy efficiency improvements. It will also enable the company to ensure the reliable delivery of large orders to its key export customers.
The company has already made a contribution to greater efficiency in the steel sector of Ukraine as a result of the introduction of modern steel making technology in 1999-2001, and the Bank’s financing will help to ensure this process continues. As a result the project can be expected to continue to have a positive demonstration effect on other steel producers in Ukraine as to how investment projects can be successfully implemented in this important industrial sector.
ISTIL (Ukraine), a joint stock company based in Donetsk, south-eastern Ukraine, is the only modern mini steel mill in Ukraine operating electric arc furnace, continuous casting machine and blooming mill. The company produces quality steel products, such as rolled and cast billets and special quality bars that are sold to rolling mills, seamless pipe manufacturers, engineering plants, distributors and stockists worldwide.
US$ 35 million corporate loan to ISTIL (Ukraine) with A/B structure consisting of two components:
a) revolving loan of US$ 25 million to support ISTIL’s (Ukraine) growing working capital needs, and
b) term loan of US$ 10 million for capital investments.
The revolving loan is the renewal of a US$ 25 million financing to ISTIL (Ukraine) approved by the EBRD in September 2001.
US$ 144 million (€118 million), of which EBRD financing represents 24%.
The project is categorised as B/1 requiring an environmental audit and analysis of environmental impacts of the proposed investments. Such audit and analysis is currently carried out by an independent consultancy firm as part of technical due diligence study.
The audit will provide recommendations in form of an Environmental Action Plan (EAP) to bring the plant into compliance with EU Integrated Pollution Prevention and Control standards for environment, health and safety in steel making.
Mr. Abid Junejo, Vice-President
122, I.Tkachenko St.,
Tel: (+380 62) 385-0440
Fax: (+380 62) 332-2421
For business opportunities or procurement, contact the client company.
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Text of the PIP