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MMK Atakas: Steely solution
09 February 2010
European Metals Deal of the Year 2009
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[mmk atakas]
[project finance]
The $1.727 billion MMK Atakas steel project reached financial close in a fragile commodities market (many steel projects had been delayed or cancelled) and at a time of enormous financial uncertainty – but in that the financing was not alone.
What distinguishes the deal from others is the financial engineering – a hybrid cashflow-based project finance type structure with full recourse to the corporate sponsors, and the bank club and ECA (SACE) taking on an element of merchant risk in the volatile steel sector over a 10 year tenor, in itself a major achievement given the lending climate.
MMK Atakas is a joint venture founded in 2007 between Russia's OJSC Magnitorsk Iron and Steel Works (MMK) and Turkish coal trader Atakas Group for the development of an integrated flat steel making complex at two sites – Iskenderun (southern Turkey) and Kocaeli (western Turkey).
The expertise of MMK in the steel industry inside...
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