ZSE is choosing a bank to provide a loan for finishing PPC

Paroplynny cyklus Inc., Bratislava (PPC), owns the future steam-gas power plant in Bratislava with an electricity producing power of 214 MW and heat power of 220 MW. Total projected costs for the project are 3.2 billion Sk, plus expenditures for labor. PPC's stockholders are ZSE(Western Slovak electricity distribution co., 66 percent), SPP (Slovak Gas Co., 24 percent) and SE (Slovak Power Plants - electricity producer, 10 percent). The main supplier is Siemens. Although construction of the power plant has already commenced, its financing is still not resolved. (ZSE has paid the down payment for Siemens from its own funds). So far ZSE has signed a contract with ING Bank for a syndicated loan to finance the project. At present, PPC is holding negotiations with ING Bank and First Boston Bank about a loan with a guarantee by SE and future guarantee by ZSE(after ZSE is transferred into a joint stock company, which will come on January 1, 1997). The loan will have an interest rate of the LIBOR plus 1 percent maximum. The original 155 million DEM value of the loan was increased to 170 million DEM. According to ZSE director J._ajkoviŹ, "the best offer so far has been made by First Boston Bank, we are, however, continuing our discussions with ING Bank. PPC has until approximately the end of this year select one of these financing alternatives. First Boston Bank is ready to provide the loan within six days after ZSE transforms into a joint stock company. The deadline for completion of the construction of the power plant, December 31, 1997, is likely to be maintained."