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Financial Corporation "Sistema"

November 16, 2016

Segezha Group signs a EUR 383.6m syndicated loan facility with the Russian and international banks

16 November 2016 - Segezha Group (hereinafter the "Group", a subsidiary of Sistema PJSFC), a leading vertically integrated forest industry holding company, announces the signing of a five-year EUR 383.6m syndicated facility agreement (the "Transaction").

ING BANK (EURASIA) JSC, ING Bank N.V. Dublin Branch, AO Raiffeisenbank, Raiffeisen Bank International AG and Sberbank acted as mandated lead arrangers and lenders. ING BANK (EURASIA) JSC acts as coordinator and documentation agent, ING Bank N.V. London Branch as facility agent and AO Raiffeisenbank as security agent under the Transaction.

The funds will be used to finance Segezha Group investment programme, which includes long-term projects such as an overhaul of Segezha pulp & paper mill and construction of a new plywood production factory in Kirov, as well as general corporate needs.

The Transaction structure envisages corporate financing and investment project financing tools. The loan term is potentially extendable up to 7-10 years through export credit financing to be provided with insurance coverage from European export credit agencies. Further investment needs of the Group can be financed by new lenders joining the syndicate through accordion agreement increasing the amount of the Transaction.

"Dynamic growth and rigid financial discipline mean Segezha Group is able to self-finance its investment programme and day-to-day operations in line with Sistema Group's financial policy. This transaction combines a pool of loans with a variety of designated purposes and credit risks from a syndicate of banks based in various jurisdictions. This international club deal will be an important step towards establishing Segezha Group's strong reputation as a reliable borrower attractive to both Russian and foreign investors", said Sistema Senior Vice President and CFO Vsevolod Rozanov. 

Segezha Group President Sergey Pomelov said: "This new international syndicated loan is a milestone event for Segezha Group, and underscores lendersí confidence in our business and strategy. The transaction will enable the Group to ramp up production and expand its market share in strategic segments, while also balancing our revenues and liabilities structure."

"This financing is an important step to support the Groupís growth and strengthen its market positioning. We are pleased to contribute to the implementation of the Group's strategic goals", noted ING BANK (EURASIA) JSC CEO Mikhail Chaikin. "The structure and potential of the loan represent the first Russian forest-industry transaction of the scale for years. It reconfirms the banksí interest in the Group", - he added.

"Financing of Segezha's investment programme is a landmark event for the Volgo-Vyatsky Bank of Sberbank. It is important that this complex and interesting deal was closed within a very short timeframe, first of all, thanks to efficient interaction between all divisions of the banks and the company, including foreign ones. The funds provided will be used to develop the Group's business, including operations in the Kirov region," said Pyotr Koltypin, Vice President and Chairman of the Volgo-Vyatsky Bank of Sberbank.

"We are pleased to have successfully closed this syndicated deal, which is momentous for the Russian market," Oksana Panchenko, member of the Management Board, Head of Corporate Banking and Corporate Finance Division of Raiffeisenbank affirms. "The loan agreement signed with  Segezha Group is the first deal of such scale and complexity between European banks and a Russian industrial enterprise in the last two years." 

 

 

 

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