Armenian Copper Program (ACP) Enters Corporate Bonds’ Market


2007-08-28 17:30:00

One of the biggest ore mining and smelting companies of Armenia,
Armenian Copper Program (ACP), is going to enter the market
with corporate coupon bonds in the nearest future. Today ACP and
ArmSwissBank signed an agreement on placement of the first bonds
issue. ArmSwissBank is the main underwriter of the issue. Yesterday,
ArmSwissBank signed an agreement with other members of the syndicate
of the underwriters of ACP’s bonds, Armenian Development Bank and
"Future Capital Market" investment-brokerage company.

As the Executive Director of ACP, Gagik Arzumanyan, told ArmInfo,
the volume of the first bonds issue is 500 mln AMD, which will aim to
replenish the company’s current assets. "There are free resources in
the home market, which we intend to effectively use by means of bonded
loans. But our key goal is to gain investors’ trust by issuing bonds
and, may be, to implement the planned program, i.e. to start IPO in
international markets in the future". G Arzumanyan said.

At the same time, the Executive Director of ArmSwissBank, Gevorg
Machanyan, noted that ACP’s bonds will undoubtedly be in demand in the
market. He said that the period of bond turnover is 18 months with 10%
yearly interest.

Coupon payments will be made every six months. The bank is obliged
to make the initial redemption of half of the loan, 100 mln AMD will
be placed in free market, and 150 mln AMD among the members of the
syndicate. According to him, diversification of financial resources
for such a company as ACP is a recipe for success. Creation of steady
financial opportunities will allow the company to develop successfully
and carry out its strategic tasks.

To note, ACP is the owner of the Alaverdi metallurgical plant,
developer of the Teghut copper- molybdenum deposit, and it also
indirectly owns the Drmbon deposit of copper and gold in Nagorno-
Karabakh. An agreement has been reached between the company and
Vneshtorgbank (Russia) on granting $200 mln credit for developing of
the Teghut deposit. G.Arzumanyan told ArmInfo that the first stage of
the investment program on Teghut implies construction of a mining and
concentration plant with capacity of 7 mln tons of ore per year. At
the second and third stages the capacity of the plant will be doubled
and tripled.

ArmSwissBank was established in 2005, and it is steadily developing in
investment, corporate and private banking. The first client issuer,
whose bonds were successfully placed by ArmSwissBank in June, was
the multi-industry Valletta company. "We are not going to issue our
own securities yet, but trying to help the market participants place
their securities. From the viewpoint of implementation of this process,
it is very important to have enough issuers, investors, and financial
mediators in the market," G.Machanyan emphasized.

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