Narrative
Full Description
Project narrative
On July 4, 2014, a syndicate of 12 banks, including Bank of China (Hong Kong) Limited (BOCHK) and Bank of China (Luxembourg) S.A. (BOC Luxembourg), signed a $3.2 billion USD syndicated loan agreement with COFCO Corporation (a Chinese state-owned food processing holding, manufacturing, and trading company) to finance COFCO's acquisitions of a 51% stake in Noble Agri Limited (NAL) — the Bermuda-incorporated agri-business of Singapore-listed Hong Kong-based commodities company Noble Group Limited — for an initial purchase price of $1.5 billion USD and a 51% stake in Nidera Capital B.V. (the owner of Nidera B.V., a Dutch commodity trader and agri-business company based in Rotterdam) for a consideration of $1.3 billion USD. This loan was divided into two tranches: a $1 billion USD bridge tranche with a maturity period of 12 months, an interest rate based on LIBOR plus a margin of 100 basis points (bps), and no fees and a $2.2 billion USD tranche with a maturity period of five years, an interest rate based on LIBOR plus a margin of 135 bps, and fees. The proceeds of the $1.1 billion USD bridge tranche were to be used by the borrower for the acquisitions and the proceeds of the $2.2 billion USD tranche were to be used to repay a shareholder loan. BOCHK committed $229 million USD and BOC (Luxembourg) committed $100 million USD. Record ID#104698 captures BOCHK's contribution. Record ID#104699 captures BOC (Luxembourg)'s contribution. In addition to BOC, the following lenders contributed the respective amounts to the loan syndicate: HSBC Holdings ($451 million USD), DBS Bank ($470 million USD), The Bank of Tokyo-Mitsubishi, Ltd. (BTMU) ($301 million USD), Société Générale Asia Limited ($301 million USD), Commonwealth Bank of Australia (CBA) ($282 million USD), Coöperatieve Rabobank International Hong Kong ($282 million USD), Westpac Banking Corporation ($282 million USD), Banco Bilbao Vizcaya Argentaria, S.A. ($225 million USD), Australia and New Zealand Banking Group (ANZ) ($188 million USD), and Standard Chartered Bank Plc ($89 million USD). HSBC served as coordinator. BOCHK served as facility agent. Lenders were able to join either the five-year tranche or both. In February 2014, COFCO entered into an agreement to purchase a 51% stake in Nidera. In April 2014, COFCO agreed to purchase a 51% stake in Noble Agri Limited. The acquisitions became wholly unconditional on September 30, 2014 and then was completed October 14, 2014. To complete the acquisition, COFCO established COFCO International Limited (CIL) (later known as COFCO International Holdings Limited) — a Cayman Islands-incorporated company and wholly-subsidiary of COFCO (Hong Kong) Limited which itself is wholly owned by COFCO Corporation — in September 2014. A consortium of investors led by HOPU Investments and including Temasek, the International Finance Corporation (IFC), and Standard Chartered Private Equity Private Equity Firm subscribed for a 40% stake in COFCO International Limited to provide equity funding for the acquisition. In May 2015, China Investment Corporation (CIC) subscribed to a 19.9% stake in COFO International Holdings. Noble Agri was the global agricultural platform of Noble Group. It primarily engaged in the origination, storage, processing, transportation, distribution and trading of grain and oilseeds, soft commodities and sugar by originating from regions such as Brazil, Argentina and the Black Sea region, and then supplying to markets with high demand such as China, India, and the Middle East. Noble Agri had collection plants, a processing, and a port in Timbúes in Argentina. Nidera was a major international agribusiness and trading company headquartered in the Netherlands with domestic and international operations in 18 major export and import countries and with distribution to its products to over 60 countries in the world. Nidera was based in Rotterdam and the other 49% stake remained controlled by the founding families of the company. The acquisition of the two agribusinesses was expected to improve COFCO's international platform and help create a stable global grains corridor between producing countries and the world's largest agricultural commodities importer in China. COFCO planned to integrated COFCO International with Nidera and Noble Agri, with asset integration expected to be completed in five years with COFCO International listing on stock markets in 2019. These were the largest overseas acquisitions in China's Grain sector. In December 2015, COFCO International announced it would require the remaining 49% of Noble Agri it did not already own. In March 2016, COFCO acquired the remaining 49% and renamed the company COFCO Agri Limited. In August 2016, COFCO announced its imminent acquisition of the remaining 49% stake in Nidera it did not already own. The acquisition was completed in February 2017. In 2015, Nidera announced an annual lose because of a rogue biofuels trader that caused a net loss of $188 million USD. In addition to the losses, other accounting troubles in its Latin American operations exposed in 2016 caused COFCO International to seek to divest parts of Nidera. Then, on November 6, 2017, COFCO International agreed to sell the seed business of Nidera B.V. to Syngenta AG — a Swiss agribusiness conglomerate and pesticide and seeds producer owned by Chinese state-owned chemical company China National Chemical Corporation (ChemChina) — to allow COFCO International to focus on cereals, edible oils, and sugars.