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Overview

Bank of China contributes to a $400 million USD syndicated loan to HBIS for its acquisition of a 41% ownership stake in Duferco International Trading Holding S.A. (Linked to Record ID#101001)

Commitments (Constant USD, 2023)$205,110,636
Commitment Year•2014Country of Activity•SwitzerlandDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 18, 2014
Start (actual)
Jun 25, 2015
End (actual)
Jun 25, 2015

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

State-owned companies

  • Hesteel Group Company Limited (formerly Hebei Iron and Steel Group Co., Ltd. (HBIS))

Loan description

2014 $400 million USD syndicated loan from China EximBank, BoC, and others to HBIS for its acquisition of a 41% ownership stake in Duferco International Trading Holding S.A. in Switzerland

Interest type•Unknown

Narrative

Full Description

Project narrative

On September 23, 2014, Chinese state-owned iron and steel manufacturer Hebei Iron and Steel Group Co., Ltd. (HBIS) announced its intentions to acquire majority control of Duferco International Trading Holding S.A. (DITH) — a Switzerland-based steel trading firm (the world's largest) and the trading arm of steel business Duferco Participations Holding S.A. — for a consideration of $400 million USD (RMB 2.456 billion). Then, on November 18, 2014, HBIS signed a formal equity acquisition agreement to acquire a 41% stake in DITH from Duferco. As Tangshan Iron and Steel Group Company Limited (Tangsteel), a subsidiary of HBIS, acquired a 10% stake in DITH in March 2013 for $73 million USD, the acquisition would leave HBIS with a 51% stake in DITH. Then, sometime in 2014 or 2015, a syndicate of at least two banks — including the Export-Import Bank of China and the Hebei Branch of the Bank of China (BOC) — issued a $400 million USD syndicated loan to HBIS to support its acquisition. Record ID#101001 captures China Eximbank's contribution. Record ID#101003 captures BOC Hebei Branch's contribution. The acquisition would allow HBIS to use DITH's global marketing and distribution network to more effectively market and sell its steel products. On April 17, 2016, the acquisition was approved by the European Commission. South Africa's Competition Commission approved the merger on or around June 11, 2015. The acquisition was finalized on June 25, 2015.

Staff comments

1. The Chinese project title is 河北钢铁并购瑞士德高公司项目. 2. China Eximbank is known to have issued a loan to support HBIS in this $400 million USD acquisition. BOC is known to have been part of a $400 million USD syndicated loan for the acquisition. Therefore, AidData assesses that China Eximbank contributed to the $400 million USD syndicated loan. 3. It is unclear whether China Eximbank and BOC Hebei Branch were the sole contributors to the syndicated loan. For the time being, AidData has assumed so, and estimated the contribution of each bank by assuming they contributed equally ($200,000,000 USD) to the loan.