China Merchants Bank Co., Ltd provides $329 million loan to Shandong Gold Mining (Hong Kong) Co. Ltd for acquisition of 50% stake in Argentina Gold (Bermuda) II Ltd. and Minera Argentina Gold S.R.L. from Barrick (Linked to Project ID#62557, #69239, #69238)

On June 20, 2017, Shandong Gold Mining (Hong Kong) Co. Ltd. (SDG Hong Kong) and several financial institutions entered into a $960 million term loan facilities agreement. The loan proceeds were to be used by the borrower purchase of a 50% equity interest in Argentina Gold (Bermuda) II Ltd., as well as equity interest in Minera Argentina Gold S.R.L. to support SDG Hong Kong's acquisition of Veladero Mine, which is located in the San Juan province of Argentina. China Merchants Bank Co., Ltd. New York Branch (private bank) acted as the facility agent, and Bank of China Limited, Shandong Branch; China Merchants Bank Co., Ltd., Jinan Branch; Bank of China Limited, Seoul Branch; Bank of China (Hong Kong) Limited; China Merchants Bank Co., Ltd., Hong Kong Branch; and China Merchants Bank Co., Ltd., Offshore Banking Center also contributed. As of December 31, 2018, SDG Hong Kong had deposited guarantees into the banks from which they received the syndicated loan. This amount of guarantee was used to calculate the transaction value, as usually when a loan guarantee is issued, the guaranteed amount is equivalent to the face value of the loan/loan principal. Shandong Gold Mining (Hong Kong) Co. Ltd deposited $329 million into China Merchants Bank Co., Ltd ($129 million to the New York Branch, $100 million to the Hong Kong Branch, and $100 million to the Offshore Banking Center. Shandong Gold also deposited RMB 1,126.9 million (as captured via Project ID#69239) and $347.3 million (as captured via Project ID#69238) into the Bank of China Limited Shandong Branch. SDG Hong Kong was incorporated in Hong Kong on February 27, 2017 with limited liability as a wholly-owned subsidiary of SDG Group. To provide additional funds for the Veladero Acquisition, SDG Hong Kong also obtained a term loan of $300 million from the China Development Bank Hong Kong Branch (see Project ID#62557).

Additional details

1. Even though Shandong Gold Mining (Hong Kong) Co., Limited is a wholly-owned subsidiary of SDG Group (of Financier Country origin), they provided a guarantee supporting this loan facility.Even though Shandong Gold Mining (Hong Kong) Co., Limited is a wholly-owned subsidiary of SDG Group (of Financier Country origin), it provided a guarantee supporting this loan facility. 2. The all-in interest rate for this syndicated loan was estimated as average 6-month LIBOR in June 2017 (1.432%) plus 1.25% (2.682%).

Number of official sources

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Number of total sources

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