ezzsteel issued the following clarification in respect of the financing for its DRI production projects.

ezzsteel wishes to make clear the following:

1. In September 2011, immediately following the Court of First Instance's decision to annul the licenses previously awarded to ezzsteel and three other Egyptian steel producers in 2008 and relating to the construction of Direct Reduced Iron modules and additional meltshop facilities in Sokhna Suez, ezzsteel stopped all construction at the site until the terms and conditions for the awarding of licenses are agreed with the authorities. As a consequence, since that time, there has been no need for further payments hence why existing bank facilities that relate to the DRI project remain undrawn.

2. Lending banks have confirmed that the loan agreement continues to be in effect and that the funds are available for the project once the licence issue is resolved.

3. The authorities have confirmed their intention to replace the annulled licences and ezzsteel is still in negotiations in that respect.

4. The licenses that have been annulled do not relate to any of ezzsteel's current production but only to future projects.

5. ezzsteel's production facilities continue to operate normally.

Source - 4-traders.com

(www.steelguru.com)