China Eximbank provides EUR 115 million loan for Sinotrans acquisition of equity stakes in 3 Romanian transport and logistics companies in 2020

On September 26, 2019, Sinotrans Limited approved a proposal to acquire 100% equity stakes in 7 companies registered by Kuijken Logistics Group (KLG) Europe Holding B.V. — including KLG Europe Eersel B.V., KLG Europe Rotterdam B.V. and KLG Europe Venlo B.V., in the Netherlands; KLG Invest Europe SRL, KLG Europe Logistics SRL and KLG Trucking SRL in Romania; and KLG Europe Bradford Limited in the United Kingdom — for no more than EUR 386 million. In order to facilitate the acquisition of these 7 companies, Sinotrans Limited established three special purpose vehicles in the Netherlands known as SE Logistics Holding B.V. (SPV1), SE Netherlands Logistics Holding B.V. (SPV2), and SE Romania Logistics Holding B.V. (SPV3). On October 21, 2019 and November 6, 2019, these transactions passed the antitrust review of the German Federal Agency for Enterprise Integration and the Dutch Consumer and Market Authority, respectively. Then, on December 12, 2019 and June 3, 2020, SPV2 and SPV1 paid KLG Europe Holding B.V. EUR 282,980,226 and EUR 90,727,000, respectively, to facilitate the acquisition of the 7 companies. On December 16, 2020, Sinotrans Limited and China Eximbank signed an EUR 115 million loan agreement. The loan carries a 7-year maturity and a 1.1% interest rate. The borrower was expected to use the proceeds of the loan to support its acquisition of 100% equity stakes in KLG Invest Europe SRL, KLG Europe Logistics SRL and KLG Trucking SRL.

Additional details

1. The face value, interest rate, and maturity length of the China Eximbank loan are drawn from the following source: http://www.sinotrans.com/attach/0/6866acc8f5844800b552e0e840bd3a11.pdf. 2. On the same day that China Eximbank issued its EUR 115 million loan to Sinotrans (December 16, 2020), China Development Bank issued an EUR 109 million loan to Sinotrans. These two loans have identical final maturity dates (December 16, 2027). However, the purpose of the China Development Bank loan is unknown. This issue warrants further investigation. 3. The Chinese name of the China Eximbank loan agreement is 《中国进出口银行与中外运控股项目公司关于中外运收购KLG下属物流公司股权再融资项目贷款协议》. 4. Sinotrans Limited (commonly referred to as Sinotrans) is one of the largest logistics companies in China, also providing support services including storage and terminal services, trucking and marine transportation. The company was incorporated in 2002 and listed on the Hong Kong Stock Exchange in 2003 as a vehicle for the core business, assets and staff of the state-owned China National Foreign Trade Transportation (Group) Corporation. In 2009 the company was reorganized together with the China Changjiang National Shipping (Group) Corporation (CSC) to form Sinotrans&CSC Holdings. A strategic merger of this new company together with China Merchants Group received approval from the State Council of the People's Republic of China in December 2015, and by April 2017 Sinotrans Limited (and its former subsidiary Sinotrans Shipping) had become direct subsidiaries of China Merchants Group. 5. Some sources suggest that the borrowing institution is a special purpose vehicle (SPV) that is wholly-owned by Sinotrans Limited. If this is true, the borrowing institution is likely SE Romania Logistics Holding B.V. This issue warrants further investigation. 6. KLG Invest Europe SRL, KLG Europe Logistics SRL and KLG Trucking SRL are private limited liability companies incorporated under the laws of Romania owned as to 100% by KLG Europe International B.V., 100% by KLG Europe Rom Imobiliare SRL and 99% and 1% by KLG Invest Europe SRL and KLG Holding respectively. KLG Invest Europe SRL and KLG Trucking SRL are principally engaged in the transport and logistics sector, and KLG Europe Logistics SRL is principally engaged in freight forwarding services (road/sea/air transportation), logistics and warehousing services.

Number of official sources

8

Number of total sources

12