Capital Partners M&A consultancy last week brokered a 140m-euro line of credit from the London subsidiary of Credit Suisse Swiss bank for Romstrade constructions firm of Giurgiu controlled by businessman Nelu Iordache, owner of Blue Air. This is one of the largest loans secured by a Romanian company since the beginning of this year and the biggest one contracted by a constructions firm for infrastructure projects.
"Negotiations for the loan started in August, during the very period Lehman Brothers collapsed. Romanian banks could not commit and we turned to the banks in London, with the subsidiary of Credit Suisse as the one that proved to be interested in this project," Andrei Diaconescu, a partner with Capital Partners, told ZF. Loan repayment terms are in line with market ones, but they are much more rigid than in the boom period of the constructions field.
Romstrade will use the credit line to finance works for the rehabilitation of DN67C national road (Bengesti-Sebes, with a 148-km length), a contract totally worth 385m euros and having 2010 as completion deadline. Romstrade won the project in 2008 on the basis of a supplier credit through which the company pledged to get financing.
In the past two years, and particularly during Ludovic Orban's term at the Transport Ministry, Romstrade has won several contracts for the rehabilitation of national roads and the construction of some orbital roads, totally worth above 650m euros.
As a matter of fact, the company has boasted one of the most dynamic growth paces in the sector, reaching turnover worth 198m euros in 2007, 10 times higher than in 2006, when it hit 18.5m-euro turnover. Additionally, the company's net income in 2007 amounted to approximately 20.1m euros, 20 times higher than in 2006.
According to information from CNADNR, Romstrade, together with Vectra Service, is building the Bucharest orbital road, a contract worth 20m euros, VAT not included.
Its other contracts are totally worth around 150m euros, and entail the rehabilitation of national roads and multi-annual maintenance in Craiova, Alexandria, Ploiesti and DN 66 (National Road 66) between Baru and Hateg.
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