Established in 1991 to grant assistance to the CEE states in their switchover from the centrally-planned to market-driven economy, the European Bank for Reconstruction and Development (EBRD) completed in December 1998 joint funding for technology to modernize the aluminium production at Slovalco Žiar nad Hronom, a.s. The loan totals US$126 million and becomes due and payable in 2003. The EBRD has provided funds together with Crédit Lyonnais through syndicated funding from Dresdner Kleinwort Benson, NM Rotschild & Sons Limited and Société Générale as co-managers and Reiffeisen Zentralbank Österreich AG as the syndicated loan manager-general. According to the statement by EBRD's S. Jackson, the syndicate has surpassed the expected interest with Paribas, Den Norske Bank, Erste Bank, ING Barings and the Chase Manhattan Bank being involved therein as managers-general.

"The involved banks represent top quality, which reflects a marked foreign income and the strength of their management," stated N. Doyle, the EBRD acting vice president for finance. "This brings out that despite the current financial turbulence perceived in the emerging markets there are still opportunities for strong projects in Central and Eastern Europe. Moreover, the success of the syndicate shows a clear wish of foreign creditors to continue in support to long-term investment in the region, particularly in alliance with such international financial institutions as the EBRD."

Ch. Mason, a head of Crédit Lyonnais Metals & Mining, noted in this connection: "Slovalco has successfully invested five-year funds with a rate of return substantially lower than that provided by Slovak government bonds. All this is exceptionally remarkable in tough market conditions at a time that the confidence in the metal sector is declining and the prices are still low. The company is developing an efficient programme of production and is becoming a world-class plant."

Slovalco, a.s., is a subsidiary company of Závod SNP Žiar nad Hronom, a.s.; other co-owners are the EBRD and Hydro Aluminium, a subsidiary company of one of the largest integrated alumium-makers in Europe, the Norwegian firm Norsk Hydro. The loan syndicate has been generated to take over and complete the construction of a primary aluminium melting shop and auxiliary facilities and commission the new melting shop featuring modern back-up and financial procedures. In 1994, the EBRD extended Slovalco a US$110 million loan repayment term so as to allow the company to complete the melting shop, which was the case in 1995. The melting shop has been in operation since December 1995.

Slovak Trade FORUM