“Siberian coal energy company” (SUEK) Andrey Melnichenko on Friday announced the completion of a syndicated $1 billion Loan consists of two tranches with maturities of five and seven years and is secured by export proceeds of the company. Funds are raised to refinance existing debt and General corporate purposes, according to a press release from the company.
On schedule, in 2016, SCEC will have to pay $1.4 billion, said the representative of the company: the funds raised will allow the refinancing plan 2016 and to defer most of the payments in 2018-2020. At the end of 2015 the net debt figure was $2.8 billion, the ratio of net debt to EBITDA ratio of 2.96. The remaining payments will be made at the expense of free cash flow, he added.
The terms of the credit agreement does not disclose SUEK, a company spokesman said only that the money involved at a floating rate. According to “Interfax”, it may amount to LIBOR+3.7 per cent. As at 30 September 2015, according to the presentation of the company, effective rate of service of the current debt was 3,44%.
Mandated lead arrangers of the deal were ING Bank N. V., Unicredit Bank Austria AG, JSC “Alfa-Bank”, Commerzbank AG, Rabobank London, Sberbank, Societe Generale in the face of SGBT Asset Based Funding S. A. and ROSBANK, Intesa Sanpaolo Bank Ireland PLC and “Nordea Bank”. Coordinators — ING and Unicredit. A new loan was approved by the other creditors SUEK.
SUEK is the largest coal producer in Russia, reserves (5,61 billion tons) is ranked fifth in the world. Andrey Melnichenko owns 92,2% of the company’s shares. The group comprises 29 coal mines, seven processing plants and installations, terminal in Vanino port “Murmansk commercial seaport” and mechanical-repair plants in eight Russian regions.
The company refinances the debt on the background of the collapse of prices for steam coal. For the first half of 2015 raw materials fell by 24% (since 2011 the prices fell by half), SUEK’s revenue decreased 16% to $2.1 billion, EBITDA amounted to $512 million (-0.4 per cent). The second half was even worse: the price of thermal coal decreased by 30% (financial performance the company has not disclosed).
In the sector of energy was not the highest load in the past year. For example, the “Raspadskaya” (82% owned by Evraz) the ratio of debt to EBITDA in the first half of 2015 was 7. The lowest rate was in “Kuzbasskaya Toplivnaya company” Igor Prokudin is 1.7 (30 September 2015).
SUEK expects the next two years the price of thermal coal will grow at about 1.5% per year. But this may not happen if China will reduce the consumption of raw materials, said BCS analyst Oleg Petropavlovsky. In this case the company, however, also insure — a loan agreement with the syndicate provides for the possibility of increasing the loan amount to $1.3 billion.