BOCOM contributes to $168 million syndicated loan for Paper Mill Construction Project (Linked to Project ID#63303)

On July 4, 2016, Bank of China (BOC), Bank of Communications (BoCom), Bangkok Bank, Mega International Commercial Bank Central Branch, and Cathay United Bank signed a $168 million syndicated loan with Cheng Yang Paper Mill Co., Ltd for a Paper Mill Construction Project. BOC contributed $81 million from its branches in Ho Chi Minh City, Grand Cayman, Dong Guan and Macau (as captured via Project ID#63303). The size of BoCom's contribution (captured via Project ID#86021) is unknown. Loan repayment was scheduled to begin at the end of 2018 in ten equal installments each six months. Nine Dragons Paper Limited issued a corporate guarantee in support of the loan. The purpose of the project was to construct a containerboard machine — with the capacity to produce 500,000 tons of recycled containerboard per year — at a paper mill that is located within My Phuoc Industrial Park in Binh Duong District and Binh Duong province. The project commenced on or around June 1, 2016. It is not clear whether or when this project was completed.

Additional details

1. The Chinese project title is 越南正阳纸厂二期. 2. Nine Dragons Paper Limited is a publicly listed (private) paper manufacturing company in Mainland China, engaging in the manufacturing of containerboard products which include linerboard, duplex board as well as pulp. Its CEO and largest shareholder is Mrs. Zhang Yin. Nine Dragons Paper Limited paid $22.8 million to acquire a 60% ownership stake in Cheng Yang Paper Mill Co., Ltd from Best Shine International Development, a Cayman Islands-based subsidiary of Taiwanese firm Taiwan Pulp & Paper in 2008. Then, in June 2015, Nine Dragons Paper Limited increased its ownership stake from 60% to 65%. Many large containerboard producers from China have relocated due to Vietnam due to rising land and labor costs at home. 3. For the time being, AidData has estimated BOCOM's contribution by assuming that the five lenders contributed equal amounts ($33,600,000) to the loan syndicate.

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