Banks, Energy, Estonia, Financial Services, Loan, Mergers and take-overs

Eesti Energia on Thursday signed loan agreements with Swedbank, OP Corporate Bank and SEB in the total amount of 300 million euros with a deadline of three years, Eesti Energia said.

Eesti Energia CFO Andri Avila said that even thought the liquidity of Eesti Energia is very good, the company has an ambitious growth plan, for the covering of which the raising of additional capital is necessary.

"Considering the recent Nelja Energia transaction, the 152 million euro bond redemption upcoming this year and other possible investments originating from the strategy, the signing of additional loan agreements was necessary," Avila said, adding that according to plan, some of the new loans will be left in the liquidity buffer and in reality will not have to be put to use.

"The liquidity buffer requirement to a certain extent also comes from international ratings agencies that are keeping an eye on the financial status and activities of Eesti Energia," Avila said.

He said that the interest rates of the loan agreements are favorable for Eesti Energia. "If the signed loans were to be put immediately fully to use, then their weighted average interest rate today would be 0.47 percent," Avila said.

The volume of the loan agreement signed with Swedbank is 150 million euros, the volume of the agreement with OP Corporate Bank is 100 million euros and the volume of the agreement with SEB is 50 million euros.

Eesti Energia also has previous liquidity loan agreements with OP Corporate Bank and Swedbank in the amount of 150 million euros. This means that Eesti Energia will be able to use loans in the total sum of 450 million euros.