TMK, the world's second largest steel pipe producer, said it would use Eurobond proceeds to fund a loan to TMK Steel Ltd., its key shareholder, to increase its stake in the company. After the debt is repaid, the company intends to use the funds to finance its strategic investment program, TMK said.
The company's strategic investment program until 2010 projects about $1.2 billion in capital investment. TMK, which accounts for 42% of domestic pipe output, said it had implemented 25% of this program, which aims to raise production efficiency, product quality and expand the range of seamless pipes.
TMK, which produced 2,860,000 metric tons of pipes in 2005, including 750,000 metric tons of pipes for exports, said the bonds would be issued by TMK Capital S.A., its Luxemburg-based special purpose vehicle. The bond issue will be managed by City Group, Credit Suisse, Dresdner Kleinwort and Renaissance Capital, TMK said.
