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Overview

ICBC contributes $20 million to $40 million syndicated PxF facility for Grupo Scheffer to receive export prepayments

Commitments (Constant USD, 2023)$20,634,676
Commitment Year•2020Country of Activity•BrazilDirect Recipient Country of Incorporation•BrazilOverseas Jurisdiction•United Arab EmiratesSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 21, 2020

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% host country ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Private Sector

  • Coöperatieve Rabobank U.A. (Rabobank)

Receiving agencies

Private Sector

  • Grupo Scheffer

Collateral providers

Private Sector

  • Grupo Scheffer

Loan description

ICBC contributes to USD 40 million syndicated PxF facility for Brazilian company Grupo Scheffer to receive export prepayments in 2020

Interest type•Unknown

Collateral

The pre-export finance (PXF) facility was collateralized with future revenues from grain export sales.

Narrative

Full Description

Project narrative

On November 21, 2020, Grupo Scheffer signed a $40 million pre-export finance (PXF) facility agreement with Coöperatieve Rabobank and the Dubai (DIFC) Branch of the Industrial and Commercial Bank of China Limited (ICBC) for export prepayment purposes. Each bank contributed $20 million to the facility. The transaction also involved the issuance of credit notes and a rural land fiduciary assignment agreement granted by companies of the Scheffer Group.

Staff comments

1. Grupo Scheffer is a Brazilian grain production company. It produces cotton, soybeans, and corn. The company also engaged in cattle farming. Since 1983, Scheffer Scheffer has produced cotton and cottonseed, soybeans, corn and raised and fattened cattle in the states of Mato Grosso and Maranhão, in the Central-West and Northeast regions. 2. Veirano Advogados acted as legal advisor in the transaction. 3. A pre-export finance (PXF) facility is an arrangement in which a commodity producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.