Azerbaijan, Baku, Nov. 7 /Trend A.Akhundov/
The State Oil Company of Azerbaijan (SOCAR) retains a credit debt at a level of $1.5 billion, Vice President for Financial Affairs Suleyman Gasimov told Trend on Wednesday.
"Recently, in accordance with the repayment schedule, we returned 42 million euros to the Dutch banking group ING 42. Prior to that we paid back loans to French bank BNP Paribas and Germany's Deutsche Bank. So this level is controlled and we try to adhere to the covenant," Gasimov said.
In addition he said, over the past three months, the State Oil Company has again attracted loans from the Deutsche Bank, SNBC, JP Morgan - each worth about 100 million euros.
Gasimov said earlier, SOCAR may need $500 million by the end of the year, $130 million of which is needed for the construction of a new refinery. The remaining funds will be used for the internal needs of the company and other projects implemented by SOCAR abroad in Switzerland, Ukraine and Georgia.
The limit of foreign debt for SOCAR is $2 billion which the company will follow for six months on the basis of the covenant in the loan agreement with BNP Paribas. The liabilities of the company can not exceed this limit until full repayment of the loan portfolio of the bank.
"These restrictions ($2 billion) do not apply to the entire group of SOCAR companies, but only to the Azneft production association, two refineries in Azerbaijan, the marketing department and economic operations, as well as SOCAR's main office," the company's vice president said previously.
Gasimov said currently the credit portfolio of these companies is $1.5 billion, of which more than $500 million accounted for Eurobonds, 500 million manat - the remainder of the state debt, and the rest is accounted for with BNP Paribas, Natixis, Yapi Kredi Bank.
According to the legal loan documents, the covenant is a contractual obligation of the borrower to the creditor which contains a list of specific actions that the borrower is obligated to perform or refrain from performing for the duration of the credit agreement. In the case of violation of the provisions of the covenant, that is non-fulfillment or failure to perform, the creditor may demand the immediate return of the outstanding loan amount and the interest due.
SOCAR includes production associations Azneft (companies producing oil and gas on land and sea), Azerkimya (chemical industry) and Azerigas (gas distribution).
SOCAR is the only oil producer in the country. It owns two refinery plants as well as gas stations in Azerbaijan, Georgia, Ukraine and Romania. In addition the State Oil Company acquired a retail network in Switzerland. SOCAR is co-owner of the largest Turkish petrochemical complex Petkim and recently acquired Itera Georgia.