Bruce Barnard | Dec 18, 2009 11:55AM EST
Fesco, Russia's biggest ocean carrier, received a $100 million five year loan from the European Bank for Reconstruction and Development to support its debt restructuring program.
Fesco said the loan from the London-based EBRD will not increase its leverage, but replace its short-term debt and significantly improve its balance sheet and debt repayment schedule.
"The success in securing the EBRD loan will open up additional opportunities for the company in terms of access to capital, both debt and equity," said Fesco president and chief executive Sergei Generalov.
The EBRD loan is part of Fesco's financial management program, aimed at reducing leverage and improving the company's debt profile.
The Vladivostok-based company said it reduced its debt in 2009 to $850 million from $1.2 billion at the beginning of the year. It expects to trim its debt by a further $300 million in 2010.
The EBRD, which provides loans to private firms in post-communist European nations, has a 3.75 percent stake in Fesco.
Fesco, which also operates one of Russia's biggest private freight railways and port terminals, booked a profit of $356 million on revenue of $1.25 billion in 2008.
The company has been hard hit by the downturn in the Russian economy in 2009 forcing the lay up of some of its container ships.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
