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Overview

ICBC contributes to $850 million syndicated pre-export finance facility to Uralkali for debt financing and general corporate purposes (Linked to Record ID#100774)

Commitments (Constant USD, 2023)$82,227,948
Commitment Year•2017Country of Activity•RussiaDirect Recipient Country of Incorporation•RussiaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 1, 2017
Last repayment
Dec 31, 2021

Geospatial footprint

Map overview

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This loan supported a company whose assets consist of 5 mines and 7 ore treatment plants in the towns of Berezniki and Solikamsk in Russia’s Perm Region. More detailed locational information can be found at: Berezniki: https://www.openstreetmap.org/relation/1574611 Solikamsk: https://www.openstreetmap.org/relation/3437172

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

  • Bank of America Merrill Lynch International Limited
  • Commerzbank Aktiengesellschaft (Commerzbank AG)
  • Crédit Agricole Corporate and Investment Bank (CACIB) (Crédit Agricole CIB) (Formerly Calyon) (Formerly Crédit Agricole Indosuez (CAI))
  • ING Bank N.V.
  • Natixis
  • Raiffeisen Bank International AG
  • Rosbank
  • Société Générale Corporate and Investment Banking (SGCIB)
  • UniCredit S.p.A. (formerly UniCredito Italiano S.p.A.)

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • PJSC Uralkali

Implementing agencies

Private Sector

  • PJSC Uralkali

Loan desecription

BOC and ICBC contribution to $850 million syndicated pre-export finance facility to Uralkali for debt financing and general corporate purposes

Interest rate (t₀)•3.65167%Interest type•Variable Interest RateMaturity•5 years

Narrative

Full Description

Project narrative

In August 2017, ICBC and BOC were two of eleven banks that participated in a syndicated pre-export finance (PXF) facility agreement worth $850 million with PJSC Uralkali, a Russian potash producer. The PXF facility carried a maturity of 5 years and an annual interest rate of LIBOR + a 2.2% margin. The proceeds from the facility were to be used by the borrower for general corporate purposes and refinancing Urakali's existing loans. Other banks in the syndicate include Commerzbank AG, Credit Agricole Corporate and Investment Bank, ING Bank NV, Natixis, Societe Generale Corporate & Investment Bank / Rosbank PJSC and UniCredit Bank Bank of America Merrill Lynch International Limited, Bank IC ), and Raiffeisenbank JSC. BoC and IKB Deutsche Industriebank AG acted as creditors for the loan. Record ID#67098 captures the estimated financial commitment of ICBC while Record ID#100774 captures the estimated financial commitment of Bank of China.

Staff comments

1. Uralkali is one of the world’s largest potash producers and exporters. The company’s assets consist of 5 mines and 7 ore treatment plants in the towns of Berezniki and Solikamsk (Perm Region, Russia). 2. 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. Due to to various international sanctions imposed upon Russia, PXF facilities are one of the fews ways in which commodity producers (borrowers) can borrow in foreign currency. 3. The individual contributions of the 11 banks to the syndicated loan are unknown. Assuming that the 11 lenders contributed equal amounts, the estimated transaction amount committed by each lender is $77,272,727.30. 4. It is plausible, if not likely, this loan refinanced previous PxF facilities for Uralkali that BOC and ICBC had contributed to in 2015 and 2016.