Narrative
Full Description
Project narrative
On April 28, 2014, the Russian fertilizer company Acron signed a USD $400 million unsecured bridge loan with a syndicate of banks, including ICBC Moscow. The loan carried a maturity of 6 months, but other loan terms are unknown. Other lenders on the syndicate included coordinators Raiffeisenbank (also facility agent and documentation agent) and Rosbank, as well as lenders Nordea, ING, and ICBC Moscow. ICBC Moscow's contribution is captured via Record ID#110229. The loan is governed by Russian law. The bridge loan was contracted in anticipation of securing longer term pre-export financing (PxF). Then, on April 17, 2015, Acron signed a USD $525 million, longer-term PxF facility with a new group of lenders, including Bank of China as a Mandated Lead Arranger. The loan carried a maturity period of 60 months (5 years), but other loan terms are unknown. Bank of China's contribution is captured via Record ID#110256. Other members of the syndicate included Societe Generale and JSC Rosbank (serving as the Original Coordinating Mandated Lead Arrangers); AO Unicredit Bank and HSBC Bank plc (serving as Mandated Lead Arrangers alongside Bank of China), International Investment Bank (serving as Lead Arranger), and the Black Sea Trade and Development Bank (which contributed $40 million USD). Agronova Europe A.G., the Swiss subsidiary of Acron, served as a guarantor for the loan. The proceeds of the loan were to be used to repay an existing USD $400 million bridge facility (likely the $400 million bridge loan signed April 28, 2014). Loan proceeds could also be used for capital expenditure requirements, working capital, or repaying other company debts.
Staff comments
1. Acron is a global mineral fertiliser producer of complex fertilisers such as NPK and bulk blends, and nitrogen fertilisers such as urea, ammonium nitrate and urea-ammonium nitrate. The Group's key markets are Russia, Brazil, Europe and the United States. Acron has two production facilities – Acron (Veliky Novgorod, Russia) and Dorogobuzh (Smolensk Region, Russia). Acron's logistics and transportation capabilities include its own fleet of railway cars and three sea port trans-shipment facilities on the Baltic Sea – at the Kaliningrad port of Russia, at the Estonian Sillamäe port and at the Estonian Muuga port. 2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed. Due to to various international sanctions imposed upon Russia, PXF facilities are one of the few ways in which commodity producers (borrowers) can borrow in foreign currency. 3. The size of Bank of China's contribution to the loan syndicate is unknown. For the time being, AidData assumes equal contributions to the remaining face value of the loan when the Black Sea Trade and Development Bank's $40 million contribution is subtracted out: $485,000,000 divided amongst the remaining 6 members of the syndicate for an estimated contribution value of $80,833,333.33.