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News Outdoor Runs into Record Debt
Russia’s biggest player of billboard advertising, News Outdoor Group (NOG), raises $300 million in the record syndicated loan arranged by Raiffeisenbank. The previous record was set by the key rival of News Outdoor, Gallery Group, which placed eurobonds worth $175 million on the Luxemburg exchange in May. Players are getting ready for the market redistribution that may start already this fall, the analysts speculate.
NOG and Raiffeisenbank have entered into a credit agreement worth $300 million, said NOG Managing Director Maxim Tkachev without elaborating. Raiffeisenbank didn’t comment on the data yesterday, but a source with the bank community confirmed it is arranging the $300-million facility for NOG and the deal could be completed next week.
NOG’s turnover neared $300 million in 2005, the company said some time ago.
The better part of the loan, Tkachev said, will go to refinance loans raised with the EBRD in the past years (the credit facility amounted to $220 million but it wasn’t taken in whole, according to Tkachev). “The funds remaining after refinancing the EBRD loan will go to promote NOG’s business in Russia, Ukraine and Turkey." It is not just buying the firms. It is also investing in new structures, including the high-tech ones. NOG will raise additional loan to back up the business advance in India, where it has been operating since early this year, Tkachev specified.
According to analysts, the loan raised by News Outdoor is quite sizeable for the billboard market of Russia, which turnover is forecasted to exceed $1 billion only starting from this year. In investment terms, the loan will revive NOG’s parity with Gallery Group lost after the latter placed eurobonds and generated the money for large-scale purchase of billboard assets in Russia.
www.kommersant.com
All the Article in Russian as of Aug. 16, 2006
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