Iran News ...


Hormuzgan Steel of Iran signs major deal on new plant with European banks

Brussels, March 14, IRNA-After two years of lengthy negotiations a consortium of European and Iranian banks and companies signed a major 600 million dollar agreement in Brussels Monday to construct a steel plant in Bandar Abbas.

"The signing of the documentation is a very special moment ...

this deal will be regarded as a 'premiere' in many ways," Xavier d'Harveng, managing director in the global export and project finance department of the Fortis Bank, said after the signing ceremony.

"Without your vision, Mr. Moazenzadeh, without your patience and impatience and above all your support, the agreement that we had the pleasure in signing today would have remained wishful thinking," noted d'Harveng.

On his part, Iranian Deputy Minister of Mines and Industries and Chairman of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) Mostafa Moazenzadeh described the project as 'very important'.

"Steel production in Iran will be increased by 1.5 million tons," Moazenzadeh said.

Speaking to IRNA later, Moazenzadeh said 50 percent of the project is foreign financed and 50 percent Iranian.

Moazenzadeh said the German insurance group Hermes and an Italian insurance firm are supporting the project which is a greenfield steel plant to be built in Bandar Abbas with the capacity of 1.5 million tons of steel.

The Fortis Bank has arranged with two other western banks, the German KFW and the Italian MCC (Mediocredito Centrale) the amount of 320 million dollars for the financing of the project.

"We are very pleased to develop our relations with IMIDRO and generally with Iran through this new transaction," Patrick Voortman, senior manager in the global export and project finance of the Fortis Bank, told IRNA in an interview.

The Bank Mellat of Iran has granted a loan for 180 million dollars together with two other Iranian banks, Bank Sepah and Bank Refah.

IMIDRO is providing 100 mn dollars.

The project is a buy-back structure with steel sales contracts under the new Fippa law system.

In total six companies will build the project.

The partners in the consortium are SMS Demag of Italy and Germany,, two subsidiaries of IMIDRO -- the German MME, and the Italian IRASCO -- and two Iranian companies IRITIEC and Foolad Paya.

The total project is valued at 600 million dollars, said Voortman.

The off-takers, Balli Steel, Ascotec and Stemcor are also key partners in this transaction.

"It is a very important project. It is unique in nature because it is for the first time that some local Iranian banks will be involved in a major multinational project," Kambiz Shahidi, chief representative of Fortis Bank in Tehran, told IRNA.

"This marks the start of a new era of mutual cooperation. I am glad that we reached to this point. It is a major step," Shahidi added.

This is not the first time that Fortis is signing a financing project with Iran. Three years ago it signed an important transaction with Mobarakh steel.

Fortis is a Beneleux-based financial services provider active in the fields of banking and insurance.

With a market capitalization of 27,7 billion euro and around 52,000 employees, Fortis ranks among the top 20 of European financial institutions.

... Payvand News - 3/15/05 ... --

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