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IFC, ABN AMRO, Société Générale, and Partners Support Modernization of Ukraine’s Steel Industry 11.06.2008

IFC, a member of the World Bank Group, is joining with ABN AMRO Bank N.V., and Société Générale Corporate and Investment Banking to provide financing to the Industrial Union of Donbass in Ukraine that will help develop the country’s steel industry.

The $350 million long-term financing package follows an earlier IFC investment in the company. The package consists of a $100 million loan for IFC’s own account and a $250 million loan syndicated to 12 commercial banks and financial institutions. ABN AMRO Bank N.V. and Société Générale Corporate and Investment Banking acted as coordinating mandated lead arrangers and bookrunners of the syndication, which was oversubscribed.

This financing will help modernize operations at the company’s Alchevsk Iron and Steel and Dneprovsky Iron and Steel plants, which are both more than 100 years old, as well as its coke plant, Alchevsk Coke.

Sergiy Taruta, Chairman of the Board of Directors of the Industrial Union of Donbass, said,
"We are very pleased with this transaction as well as with IFC and the international banking community’s continuing support. This will allow us to replace and modernize less efficient steel facilities, using the latest state-of-the-art production technologies. The opportunity will further enable us to improve quality and range of our products, while helping us invest in more environmentally friendly improvements."

Ritva Laukkanen, IFC’s Director for Syndications and Resource Mobilization, said,
"The success of our second large-scale syndication for the company shows how IFC can be effective in mobilizing borrowings for emerging market corporates under challenging market conditions."

Hasan Mustafa, Executive Director and Head of CEEMEA Loans Syndicate at ABN AMRO Bank N.V., added,
"In the midst of the most difficult and turbulent market conditions, bookrunners worked hard to position the company as an attractive asset. Lenders viewed the well-structured deal with the benefit of IFC’s syndicated loan umbrella as a way to diversify the company’s sources of funding."

Quentin L’Hélias, Managing Director and Head of CEEMEA Loan Syndicate at Société Générale Corporate and Investment Banking, said,
"Placing this deal successfully within the pricing of Industrial Union of Donbass’ previous syndicated loan underwritten by us supports our belief that with the right partners, we can sell the company’s vision and buck market trends.

Participants in the syndicated loan:

ABN AMRO Bank N.V. Coordinating Mandated Lead Arranger
Société Générale Coordinating Mandated Lead Arranger
Cordiant Capital Mandated Lead Arranger
Natixis Mandated Lead Arranger
Raiffeisen Banking Group:
Raiffeisen Zentralbank Österreich Aktiengesellschaft
Raiffeisenlandesbank Oberösterreich Aktiengesellschaft
Mandated Lead Arranger
Efg Private Bank (Luxembourg) S.A. Senior Lead Arranger
Sumitomo Mitsui Banking Corporation Senior Lead Arranger
Alpha Bank A.E. Arranger
Bank Sinopac Arranger
Banque Cantonale Vaudoise Arranger
Credit Suisse Arranger

About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org

Ukraine became a shareholder and a member of IFC in 1993. As of March 31, 2008, IFC had invested around $887 million in 38 projects in the country. IFC’s investment program is expanding rapidly, with a focus on Ukraine’s financial, agribusiness, construction materials, retail trade and services, energy, and infrastructure sectors. IFC also offers advisory programs in the country on leasing, agribusiness, mortgage finance, and on improving the business environment. For more information, visit www.ifc.org/ukraine.

About Industrial Union of Donbass
The Industrial Union of Donbass was founded in 1995. It is a vertically integrated steelmaker and a holding company with main production assets located in Ukraine. These include the Alchevsk Iron and Steel plant, the Alchevsk Coke Plant, and the Dneprovsky Iron and Steel plant named after Dzerzhinsky. The company has operations in other Eastern European countries, including the ISD-Dunaferr plant in Hungary and the ISD-Huta Czestochowa in Poland.


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