Offshore loan structure enables loan proceeds to be injected into China via foreign debt quota
28 November 2013, Singapore – Standard Chartered today announced that it has closed a SGD 45 million term financing facility for United Envirotech Water (Changyi) Co. Ltd. (“UE Water (Changyi)”), a 70:30 joint venture between United Envirotech Ltd. (“UEL”) — a Singapore water treatment company listed on the mainboard of SGX– and Changyi Huade Weaving Co., Ltd, a local Chinese textile conglomerate. The three year amortising senior debt facility will fund the transfer, upgrading and expansion of four industrial wastewater treatment plants and a water supply plant in Changyi, Shandong, China.
The plants which have a total treatment capacity of 270,000 m3/day are installed with UEL’s membrane bio-reactor, an advanced waste water treatment technology that delivers better quality water discharge. In addition to improved water standards, this project is expected to bring about economic development to the local community and has created close to 200 employment opportunities to date.
Commenting on the project, Dr. Lin, Chairman and CEO of United Envirotech Water said, “We are proud to play an industry leading role in improving the local community’s quality of life with higher quality water discharge. The seamless execution of this transaction demonstrated Standard Chartered’s ability to combine industry expertise and local knowledge to support our growth plans in China.”
The offshore loan structure which enabled the loan proceeds to be injected into the onshore borrower (via the foreign debt quota with SAFE registration) is a solution that allows United Envirotech Water (Changyi) to capitalise the combined cash flows of the five water treatment plants. Standard Chartered was also the Mandated Lead Arranger and Hedging Bank for the transaction.
Commenting on the transaction, Conor McCoole, Head of Project and Export Finance for Asia & Americas of Standard Chartered Bank, said, “We are proud to play a key role in UEL’s growth plans in China. This is our second project financing for Singapore based UEL and it demonstrates our continuing commitment to support UEL with relevant financing solutions. It is a great example of how we help our clients achieve their goals while supporting environmentally sustainable economic development in China, one of the bank’s most important markets”