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Deal 5: Vimetco Group Legal Director Dragos Voncu on ALRO USD 40 Million Loan

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On July 7, 2021, CEE Legal Matters reported that Zamfirescu Racoti Vasile & Partners and Simmons & Simmons had advised ALRO on a seven-year USD 40 million corporate loan from the Black Sea Trade and Development Bank to Romanian aluminum producer ALRO, part of Vimetco Group, for its capital investment program. CEE In-House Matters spoke with Dragos Voncu, Legal Director at the Vimetco Group, to learn more about the matter.

CEEIHM: To begin with, tell us a bit about ALRO and the Vimetco Group.

Dragos: ALRO is a subsidiary of Vimetco N.V., (the Netherlands), a global, vertically integrated primary and processed aluminum producer.

ALRO is one of the largest vertically integrated aluminum producers in Europe, having an installed production capacity of 265,000 tonnes per annum of electrolytic aluminum, 35,000 tonnes per annum of recycled aluminum, and 335,000 tonnes per annum primary cast aluminum.

The main market for ALRO products is the European Union but the company exports its products to the U.S. and Asia, as well. ALRO is ISO 9001, ISO 14001, ISO 45001, ISO 50001 certified for quality management and has NADCAP and EN 9100 certifications for aerospace production and holds the IATF 16949 certificate for the automotive industry, with ALRO’s products adhering to the quality standards for primary aluminum on the LME, as well as international standards for flat-rolled products.

On March 18, 2019, the Index Committee of the Bucharest Stock Exchange approved the inclusion of ALRO (code ALR) in BET, the main index of the market, and in BET-TR ( the total return version of BET).

ALRO’s shares have been listed on the Bucharest Stock Exchange since October 1997 and ALRO represents the first company in the aluminum industry present in these two indices. 

Since November 16, 2020, ALRO is a member of ASI (Aluminium Stewardship Initiative), an international association that contributes to enhancing sustainability in the global aluminum sector.

The Vimetco Group is a global, vertically integrated producer of primary and processed aluminum products with production assets in China, Romania, and Sierra Leone, and a holding company in The Netherlands.

Vimetco N.V. controls annual production capacities of up to one million tonnes of electrolytic aluminum, 453,000 tonnes of processed aluminum products, 600,000 tonnes of alumina, 1.9 million tonnes of bauxite, 2.25 million tonnes of coal, three plans producing 300 megawatts of electricity, and 318,000 tonnes of baked anodes per year.

CEEIHM: ALRO recently took a USD 40 million loan from the BSTDB. What is the funding intended for?

Dragos: The USD 40 million corporate loan will be used for the financing of the capital investment program.

The seven-year loan will serve primarily to improve the company’s energy management performance as well as to increase the high value-added production capacity.

CEEIHM: Why did you opt for this particular way of raising capital?

Dragos: ALRO had a long and positive experience with the financing provided by International Financial Institutions. In 2010, it refinanced all its commercial loans using an A-B type facility provided by EBRD. The cooperation with Black Sea Trade and Development Bank started in 2015, with the bank being able to provide long-term financing, mainly for investment purposes, with competitive conditions. IFI financing brings not only good commercial quotes but also financing stability and a long-term vision.

CEEIHM: Zamfirescu Racoti Vasile & Partners and Simmons & Simmons advised ALRO. What were their individual mandates on the deal?

Dragos: On Zamfirescu Racoti Vasile & Partners’s side we had on the deal Founding Partner Ioana Racoti and Partner Elena Iacob advising us on Romanian Law matters, with the legal assistance including drafting, negotiation, and registration of the security documentation, while on Simmons and Simmons’s side we had of Counsel Corinne Noel and Partner Andrew Petry advising us on English Law matters, including the facility draft and the associated documents.

CEEIHM: Why did you choose these firms as your advisors?

Dragos: With Zamfirescu Racoti Vasile & Partners, ALRO has a long-term relationship lasting for more than 20 years and we are always more than pleased with the flawless service, legal acumen, and professionalism of the team of lawyers involved in our projects. It has to be mentioned that our collaboration goes beyond legal assistance services in financing projects, as Zamfirescu Racoti Vasile & Partners is our trusted legal adviser on all types of mandates, including corporate governance matters, mergers and acquisitions, energy and natural gas, capital markets, competition, and arbitration and litigation.

With Simmons and Simmons, we opened a recent collaboration following the transfer in their team of Corinne Noel, a very talented and experienced lawyer who (while at her prior firm) used to advise us as English Counsel for more than 15 years for almost all of our English Law financings and not only.

Simmons and Simmons has excellent references in the market and the services provided by Corinne and by their Partner Andrew Petry are very valuable and very helpful for our business.

Originally reported by CEE In-House Matters.

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