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LUKoil Gets Unsecured Loan From Gazprombank

LUKoil on Tuesday said it received a three-year, $1.3 billion loan from Gazprombank, which offered the oil giant a relatively attractive 8 percent rate on the unsecured credit

The loan will go toward capital expenditures and refinancing, said Dmitry Dolgov, a LUKoil spokesman. He declined to give a more detailed breakdown, saying only that the majority of the cash would be used to refinance loans for acquisitions made in 2008.

Dolgov said the interest rate was worse than what the company could get before the economic crisis, but he praised the loan for requiring no collateral.

The loan appears to be the second largest in LUKoil's history, topped only by a $2 billion credit in 2005 to buy assets in Kazakhstan.

LUKoil needs to repay "several hundred millions dollars" this year, Dolgov said.

LUKoil earlier decided not to apply for the state development bank's money because it found the terms unattractive.

LUKoil chief Vagit Alekperov told The Wall Street Journal earlier this month that the industry needed $10 billion in tax breaks this year to reverse declining production.

Author: Ksenia Kochneva