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IFC, Citigroup, and Societe Generale Syndicate Financing for Ukraine’s Leading Steel Producer, the Industrial Union of Donbass


In Washington
Irina Likhacheva
Phone: +1 (202) 473-1813
Email: ilikhachova@ifc.org


Kyiv, Ukraine, September 19, 2006 —The International Finance Corporation, the private sector arm of the World Bank Group, has joined with Citigroup and Société Générale Corporate and Investment Banking to syndicate a $250 million loan to the Industrial Union of Donbass for its operations in Ukraine. The transaction was oversubscribed.

IFC provided a $100 million loan to the Industrial Union of Donbass in June 2006 as part of a $350 million financing package for the company.  The $250 million B-loan has been syndicated to 17 commercial banks and financial institutions.  Citigroup and Société Générale Corporate and Investment Banking acted as coordinating mandated lead arrangers and bookrunners of the B-loan and fully underwrote the $250 million tranche.  

The Industrial Union of Donbass, a premier steel company with subsidiaries in Hungary and Poland as well as Ukraine, produced 9.2 million tons of crude steel in 2005, of which 6.6 million tons were produced by its Ukrainian operations.  IFC’s loans will help finance a $1.5 billion capital investment program to modernize the company’s operations in Ukraine.  This will help it meet international level environmental standards, improve energy efficiency, and reduce operating costs.

Sergiy Taruta, Chairman of the Board of Directors at the Industrial Union of Donbass, stated that “The capital investment program will help us strengthen our position in domestic and international markets, and I am proud to see that we have so many representatives of the international banking community supporting us in this process."

Ritva Laukkanen, IFC’s Director of Syndications and Resource Mobilization, said, "We are very pleased with the success of this large-scale syndication, which shows how B-loans can be effective in mobilizing long-term borrowings for emerging market corporates in the international financial markets.  It also demonstrates the financial community’s confidence in Ukraine and the viability of this credit."

Nadir Shaikh, Citigroup Country Officer in Ukraine, added, "The success of this syndication indicates that the highest-quality credits from Ukraine can attract strong support from international banks despite some political uncertainty. Citigroup remains committed to its customers in Ukraine and greatly values its relationship with the company and IFC."

Quentin L’Hélias, Director of Loan Syndicate Debt Capital Markets at Société Générale Corporate and Investment Banking, said, “Long-term liquidity has been building for Ukraine.  The Industrial Union of Donbass provided the right credit and growth story, while IFC had the right structure, and, together with SG and Citigroup, the right distribution and execution capabilities. We are delighted to help unlock new pockets of liquidity for this growing company, at terms that set a new benchmark for a Ukrainian corporate.”

The participants in the B-loan are:
Citibank, N.A. London (“Citigroup”) Coordinating Mandated Lead Arranger
Société Générale Coordinating Mandated Lead Arranger
ABN AMRO Bank N.V. Mandated Lead Arranger
Calyon Mandated Lead Arranger
ING Bank N.V. Mandated Lead Arranger
Bayerische Landesbank Arranger
Natexis Banques Populaires Arranger
Raiffeisen Banking Group: Arranger
-        Raiffeisen Zentralbank Österreich AG
-        Raiffeisenlandesbank Niederösterreich-Wien AG
Commerzbank AG Lead Manager
Fortis Bank S.A./N.V. Lead Manager
GarantiBank International N.V. Lead Manager
Morgan Stanley Bank International Limited Lead Manager
NM Rothschild & Sons Limited Lead Manager
Nordkap Bank AG Lead Manager
SANPAOLO IMI S.p.A. Lead Manager
XL Insurance (Bermuda) Ltd Lead Manager