Ence seals EUR 1.2b funding to finance Uruguay pulp plant
The fund will help finance construction of a new pulp mill in Uruguay.4 April 2008
MADRID - Spanish pulp manufacturer Grupo Empresarial Ence said on Thursday it had secured EUR 1.225 billion in funding to help finance the construction of a new pulp mill in Uruguay.
In a statement to the National Securities Commission, Ence said a group of banks, which included Banco Bilbao Vizcaya Argentaria, Caja Madrid, Banco de Sabadell, Banco Popular and Banesto, had agreed to provide a EUR 1.075-billion credit line to the company. Ence plans to raise a further EUR 150 million from a subordinated debt issue.
The corporate line of credit consists of three tranches. The first two have tenure of 10 years and the third one three years. Ence will pay interest at rates of between 75 and 250 basis points above 6-month interbank rates.
There had been some concerns about whether Ence would manage to secure funding at reasonable rates due to the global credit crunch. The research department of Portuguese bank BPI said the funding agreement removed uncertainties regarding a possible capital increase.
The funds will mostly go to building the Punta Pereya pulp plant near the Rio de la Plata river in the southwest Uruguayan department of Colonia. As part of its 2007-2011 business plan, Ence also plans to boost production at its Spanish plants.
[El Pais / Adrian Soto / Expatica]