Moelven refinances long-term debt

The overall amount totaling NOK 1050 million remains unchanged from the earlier agreement.

President and CEO Hans Rindal of Moelven Industrier ASA is pleased to have entered into the new five-year financing agreement on the same terms as earlier. The interest rate for the financing is in line with current market rates.

- Financial instability has contributed to a tightening of credit markets. The risk of such unstable market conditions arising is the reason why we at Moelven have a conservative attitude to financing, which involves ensuring a high equity ratio and entering into long-term loan agreements. This conservative attitude ensures foreseeability, which allows us to concentrate on developing the industry, says Mr. Rindal.

Moelven’s president interprets the renewal of loans at this time as a vote of confidence by the banks.

- The banks have seen how we have dealt with two relatively difficult years. We have turned a profit every year and emerged stronger through the financial crisis. This has not gone unnoticed, says Mr. Rindal.

Assistant Financial Director Rune F. Andersen of Moelven Industrier ASA says that the banks’ pricing is adjusted in relation to current market rates and will result in an increase in the Group’s total financial costs by approximately NOK 10 million per annum.

- Aside from the rate increase, the refinancing has been secured on terms similar to the Group’s earlier loan agreements, which includes a mortgage agreement and standard breach terms relating to equity, equity ratio and debt-equity ratio.

The banks responsible for refinancing Moelven’s debt are Nordea, DnB NOR and Handelsbanken. HSH Nordbank, which earlier was among the creditors, is discontinuing large parts of its business in the Nordic countries and is therefore not among the creditors in the new agreement.

Moelven is a full-range supplier of wood-based construction materials and associated services and has more than 3000 employees, half of which work in Norway and the other half in Sweden. There are Moelven sales offices in Denmark, England, Germany and the Netherlands. The Scandinavian market generates about 80 percent of the Group’s overall sales volume. Moelven products and services are sold to customers in three main market segments: processing, construction and DIY.