MMK looking to keep net debt at $3.2 bln in 2014
MOSCOW. Jan 13 (Interfax) - OJSC Magnitogorsk Iron & Steel Works (MMK) is planning this year to maintain its net debt level at around last year's $3.2 billion, company CFO Sergei Sulimov said during an interview given to Interfax.
"In 2014, in accordance with the confirmed budget, we plan to maintain this debt level, and our tactical task is refinance about $900 million. If there is a substantial improvement in the market situation, it is quite likely that we will put some of [our] free cash flow toward lowering debt," Sulimov said.
MMK reduced its debt by $600 million last year, he said. The company's net debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is now around 3x, which is "reasonable for the sector," he said. The group intends to lower that to 2x in the middle-term perspective, he said.
As for refinancing instruments, Sulimov said, MMK has around $2 billion in additional open credit lines from Russian and non-Russian banks. It also has Eurobonds and Russian bonds. "We'll be comparing terms. The mathematics are simple. Preference will be given to the least costly and longest debt instrument," he said.