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Norilsk Posted: Sun, 03 May 2009 [miningmx.com] -- Norilsk, the world's biggest nickel producer, is looking to ease the terms of the loan taken out on its $6.4bn (£4.3bn) purchase of Canadian rival LionOre in 2007. At the time, this was the biggest takeover of a foreign company by a Russian group, Britain's Independent newspaper reported. Moscow-based Norilsk, in which oligarch Oleg Deripaska holds a 25 per cent stake through his mining firm, United Company Rusal, is looking to "reschedule" its debt, an unidentified source told the newspaper. This means extending the repayment period of a loan. It is believed that bankers at the London offices of investment banks Rothschild and Lazard have been approached by Norilsk to help the miner sort out its debt difficulties. However, Rothschild might not win the job because it is already advising Rusal on its $14bn debt burden, which could potentially result in a conflict of interest. Norilsk arranged a $3.5bn loan through BNP Paribas and Société Générale at the time of the LionOre deal, which was then syndicated to a series of other banks. An industry source said that the collapse in metal prices meant that the company was in danger of breaching certain earnings covenants, or targets, required under the terms of the loan. However, a source in Russia downplayed the problems, arguing that Norilsk's LionOre loans do not mature until next year.
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