KredEx approves Alexela's €37 million loan
Fuel company Alexela Varahalduse AS and state credit body KredEx reached an agreement for a coronavirus loan of €37 million, allowing the company to maintain more than 500 jobs at oil shale producer Kiviõli Keemiatööstus, managed by Alexela Group.
Alexela group CEO Andreas Laane said via press release Tuesday morning: "The greatest satisfaction comes from the knowledge that as an employer, we can maintain the jobs and household stability of our employees in Lüganuse, Ida-Viru County.
The company had been hit by the slump in world oil prices earlier in the year, ahead of the pandemic breaking.
"In the first stage of adapting to the crisis, we were forced to optimize the structure of companies belonging to the group and the restructuring process consisted of 58 people at Kiviõli Keemiatööstus, whose jobs we could not maintain. As a leader, layoffs are always painful decisions. With the state's help, we can still look at the future at Kiviõli Keemiatööstus and therefore also keep stability at Lüganuse," Laane added.
The loan's term is for five years and the interest rate is set at 2 percent. The loan limit is issued in multiple parts, with the first payout set to take place this week.
The CEO added that the company pays well over €100 million in taxes yearly, with Kiviõli Keemiatööstus alone accounting for almost €10 million of that amount, so the €37 million loan is a reasonable sum for the state since it maintains tax revenue and in addition, it will be paid off in five years at the latest.
KredEx chief Ivo Kuldmäe said it is important to support companies all over Estonia and to offer them support to allow them to bypass difficulties stemming from the coronavirus crisis. New investments are also important.
Kuldmäe said: "Along with the crisis measures, we have made more than €452 million available to 778 entrepreneurs. Some of that has gone to overcome coronavirus difficulties, but some of it also has gone to making necessary investments for business development."
The freshly appointed KredEx chief added: "The key of putting crises behind us always lies in cooperation, which is why companies, banks and the state must work together to overcome difficulties and realize new opportunities. The loan given to Alexela allows us to maintain more than 500 jobs in Ida-Viru County, making up almost a third of all concern employees. It is a good example of just this type of cooperation."
Laane added: "On behalf of the employees of Alexela and Kiviõli Keemiatööstus, I am thankful to the state for and KredEx' project team for the smooth negotiations, the loan and for their operative reaction to the surprises during the negotiations."
The loan agreement sees 40 percent of Alexela Varahalduse AS' shares as collateral and the collateral is also supplemented by Alexela group resources. Alexela must maintain the aforementioned 500 jobs at Kiviõli Keemiatööstus as per conditions of the agreement.
KredEx has granted loans to businesses of all sizes hit by the coronavirus pandemic, most notably €100 million to shipping line and hotels operator Tallink, €39 million to real estate development Porto Franco and €10 million to aircraft maintenance firm Magnetic MRO.
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Editor: Kristjan Kallaste