Singapore-based bank DBS, multi-regional bank Standard Chartered and DZ Bank, the fifth largest bank in Germany, have announced the closure of an export finance facility worth $258 million with Bhushan Steel. Under the terms of the facility, which has been backed by German export credit agency Euler-Hermes AG, the agency will provide a guarantee covering 95% of the political and commercial risks related to the loan facility.
"We are extremely pleased with the export finance facility arranged by Standard Chartered Bank, DBS Bank and DZ Bank AG,” said Nittin Johari, director of finance at Bhushan Steel, in a statement. “The excellent coordination and timely execution in completing this financing and obtaining Euler Hermes support by the banks makes this transaction a very special one indeed. With this financing, we look forward to pushing ahead with our expansion plans and the ambition to become a leading integrated steel producer in India."
Bhushan Steel is India’s third largest secondary steel producer with existing hot rolled coil capacity of approximately two million tonnes per annum. The facility will support the company’s capital expansion plans, including funding the purchase of steelmaking equipment as well as services from German exporters, such as SMS Siemag, Siemens and Outotec, with a view to boosting its steel manufacturing capacity at its Orissa site.
"India is a key market for DBS and we continue to invest in building our franchise,” said Ashwin Juneja, senior vice-president at DBS India. “This coordinated financing deal has allowed us to grow our presence in a specialised foreign currency loan market with ECG/ECA backed structured funding. DBS is delighted to have assisted Bhushan Steel in its strategic thrust to become one of the top steel producers in India."
James Courtenay, global head of project and export finance at Standard Chartered, noted: "This partnership is a good example of our bank leveraging our cross-border presence in Europe and using our strong network to aid the growth ambitions of a client in one of our key markets, India. It also highlights our capabilities in securing long-term ECA-backed financing for our clients' important transactions."