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UniCredit Bank together with EGAP provides PhosAgro credit of EUR 73.4 million

Prague, 3 November UniCredit Bank Czech Republic and Slovakia and JSC PhosAgro-Cherepovets, together with EGAP, concluded an agreement to provide the company with a long-term export buyer's credit in the total amount of EUR 73.4 million (over CZK 2 billion). The credit will be used by PhosAgro-Cherepovets to finance the import of equipment from the Czech company CHEMOPROJECT NITROGEN a.s. for construction of a granulated urea production line.

“Czech exporters to Russia in sectors like machine building, metallurgy and chemicals remain active, as confirmed by this transaction. This is the largest loan covered by EGAP that we have ever issued to a Russian company. UniCredit Group’s strong position in the Russian market also played an important role in organising this financing,” said UniCredit Bank Czech Republic and Slovakia Management Board Chairman Jiří Kunert.

“UniCredit Bank in Russia and PhosAgro are long-time strategic partners,” said AO UniCredit Bank Chairman of the Management Board Mikhail Alekseev, “We are interested in long-term cooperation with our corporate customers and we seek to offer them right solutions to achieve their goals effectively with the support of UniCredit’s international presence.”

In 2014, a contract was signed between CHEMOPROJECT NITROGEN a.s., Czech Republic, as the exporter and AO PhosAgro–Cherepovets, Russia, as the customer for designing, complete deliveries of equipment and commissioning of a urea production unit, including a 1,500 tonne/day granulation unit. Construction and assembly will be handled by the customer. The value of the contract exceeds CZK 2.3 billion and the project is due to be completed in 2017. Delivery times and quality of the entire project are secured by experienced specialists from CHEMOPROJECT NITROGEN a.s.

To date, the customer has already received the process design package, basic design, confirmation of ordering key deliveries, etc. Preparation for implementation of the project is underway at the moment. Material deliveries shall commence at the start of 2016.

PhosAgro is Europe’s largest, and the world's third-largest producer of phosphate-based fertilizers, selling its production output to 100 countries. PhosAgro is one of the key clients of AO UniCredit Bank in Russia, which has significantly contributed to the closing of this transaction. UniCredit has structured the financing in the form of confirmed letters of credit in combination with post-financing and subsequent refinancing through long-term credit. UniCredit Bank in Russia also acted as a Passport Bank. Issuance of the advance payment bond represents an integral part of this transaction. This structure of financing will guarantee a spread of credit repayment for the investor depending on his cash-flow model.

The export buyer's credit is insured by the Export Guarantee and Insurance Corporation (“EGAP)”). This credit became one of the largest transactions insured in the Czech Republic this year.

According to the credit insurer EGAP this deal meets the criteria which has been set for trading with Russia. Jan Procházka, CEO of EGAP said: " Even though Czech exports to Russia have declined somewhat in the last year, EGAP has consistently said it will support guarantees for the export of high-tech equipment to Russia, even if we have taken a more cautious approach following the rouble devaluation.  New transactions must have an acceptable level of risk: in this case both the experienced domestic exporter and the borrower fully meet the key criteria for export insurance.  PhosAgro is a leader in the global fertilizer market, has international credit ratings and enjoys significant foreign currency revenue.”

PhosAgro CEO Andrey Guryev said: “After receiving a USD 440.6 million syndicated loan from JBIC to finance the construction of our new 760 ths tonne/year ammonia line, PhosAgro has agreed to a 12-year loan from UniCredit with cover from EGAP at an interest rate below 3%.

“In an environment of limited access to long-term financing, PhosAgro has once again proven it is a first-class borrower.  I would like to thank our Czech colleagues for this productive cooperation.”

03.11.2015 - 15:00
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