Dubai, UAE 19 May 2008: Interpipe, one of the world's leading producers of steel pipes and railway wheels, has finalised financing arrangements for the development and construction of a 1.32 million ton steel electric arc furnace (EAF). The new steel mill, which is to be built in Dnepropetrovsk, Eastern Ukraine, is being funded through a debt financing package totalling US$531 million with the remaining project costs being met through project sponsor equity.

The debt financing, for which Barclays Capital (the investment banking division of Barclays Bank PLC) acted as Advisor, comprises a US$344 million SACE backed Export Credit Facility and a US$187 million Pre-Export Finance Facility.

  • The US$344 million Export Credit Facility has a maturity of 10.5 years and benefits from a SACE first demand unconditional guarantee covering 85% of the loan. The fixed interest rate is set at 3.78% throughout the life of the loan. Barclays Capital and Citigroup were Joint Mandated Lead Arrangers and Underwriters for the Export Credit Facility with Barclays Capital acting as Sole Bookrunner.

  • The US$187 million Pre-Export Finance Facility has a 4 year maturity and is priced 2.25% above Libor. The facility is secured by deliveries of steel pipes under export contracts. Barclays Capital and Citigroup were appointed as Joint Bookrunners and Mandated Lead Arrangers for the Pre-Export Finance Facility, which was syndicated to a group of 13 international banks. The syndication was oversubscribed in excess of 50%.

Nadir Shaikh, Citi Country Officer for Ukraine stated: "This financing reflects Citi's commitment not only to a highly valued client, but also to the country's development. We look forward to continuing a long-term relationship with Interpipe and hope to support the company with its future financing needs, given its extensive expansion program."

Bob Mabon, Barclays Managing Director responsible for Ukraine commented: "Barclays Capital is pleased to have had the opportunity to assist Interpipe in securing favourable financing terms from SACE to fund its new electric arc furnace. Export Credit Agencies represent a valuable new funding source for both Government and companies to build projects vital to improving Ukraine's transport and industrial infrastructure. We look forward to working on additional such financings in Ukraine."

Oleksandr Cherniavskyi, CFO of Interpipe, said: "This transaction demonstrates the support of the international financial community for Interpipe and Ukraine. Interpipe has obtained competitive pricing and long tenors despite the difficult conditions prevailing in the international financial markets. The new debt facilities support Interpipe's strategy to increase the vertical integration of its steel production. This project represents one of the largest investments in Ukraine since the country's independence."

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Background information on INTERPIPE
INTERPIPE is a major global producer of steel pipes and 2nd largest producer of forged railway wheels in the world with total revenue of $1.8 bn. in 2007.

Interpipe is an export oriented company with 71% of its revenues derived from export sales in 2007 supplying products to 76 countries in the world. INTERPIPE has a network of sales offices in Ukraine, Russia, Kazakhstan, Europe, the USA and the Middle East.

In 2007 Interpipe mills produced 1,5 million tons of steel pipes and railway wheels.

In 2007 Interpipe produced 62% of its pipes for the Oil and Gas industry, 35% for industrial applications and approximately 3% for mechanical engineering. The company's production assets are based at three Ukrainian mills in the Dnepropetrovsk region.

The IFRS consolidated financial statements for the year ended 31 December 2007 were audited by Ernst & Young (www.ey.com)

© Press Release 2008