19 Aug 2009 14:58

NOVATEK refinancing Yamal LNG debt to Gazprombank

MOSCOW. Aug 19 (Interfax) - NOVATEK is refinancing debt owed by OJSC Yamal LNG to Gazprombank, the gas producer said in a quarterly earnings report.

NOVATEK on June 4 closed a deal to buy 51% of OJSC Yamal LNG, which holds the license to the South Tambey gas condensate field, from three firms associated with Gennady Timchenko's Volga Resources fund for $650 million.

NOVATEK said in the earnings report that as a result of the acquisition, NOVATEK'S debt to the bank had mounted by 2.833 billion rubles. Yamal LNG was due to pay 18.5% on a Gazprombank loan maturing in December 2010.

The report says that NOVATEK's directors on August 11 approved a loan of 3.5 billion rubles to refinance the debt ahead of schedule at 15% pa.

It also said it paid an initial $200 million cash for the 51% of Yamal LNG in June and was due to pay another $50 million not later than November this year.

NOVATEK issued 9.219 billion rubles or $300 million in promissory notes at 14% pa on June 4 to fund the deal.

The rate on the notes comes to 14%. The notes should be redeemed upon request but no earlier than February 1, 2010. On June 8, NOVATEK paid 320 million rubles for the notes and reissued 8.889 billion rubles in securities at 13.9%.

According to the report, NOVATEK also has liabilities to pay an additional $100 million to the former owners of Yamal LNG if a contract is signed with Gazprom for LNG export from the Yuzhno-Tambeiskoye field. An agreement on for this should be signed no later than December 30, 2011, otherwise NOVATEK will not be liable for this payment.

NOVATEK also said that it had raised a $100 million loan from Calyon Rusbank at Libor + 5.25. The loan will be drawn until July 2010. In July the company received $50 million of this loan in accordance with its agreement.