ICBC participates in $750 million syndicated pre-export facility for JSC Acron (Russia) (Linked to Project ID#92495)

On May 3, 2017, JSC Acron (Russia) signed a $750 million, five-year syndicated structured pre-export finance facility agreement with a group of 10 lenders. The agreement was governed by English law. The members of the lending syndicate included ING Bank N.V., AO UniCredit Bank., HSBC Bank plc, ING Bank Belgium SA/NV, Bank ICBC (JSC), SGBT Finance Ireland Designated Activity Company, PJSC Rosbank, Crédit Agricole Corporate & Investment Bank, Sberbank of Russia, and Joint-Stock Commercial Bank Bank of China (Russia). Then, on May 14, 2019, the term of the syndicated structured pre-export finance facility agreement was extended for two years (from five years to seven years), and the grace period was prolonged from two to four years. Then, on April 29, 2021, the term of the facility has been extended for another two years with a new final maturity date in May 2026. The Coordinators and Bookrunners of the deal were ING Bank N.V. and AO UniCredit Bank. ING Bank N.V was the facility agent. CBC's contribution to the syndicate is captured in Project ID#92492. Bank of China (Russia)'s contribution to the syndicate is captured in Project ID#92495.

Additional details

1. Acron is a global mineral fertiliser producer of complex fertilisers such as NPK and bulk blends, and nitrogen fertilisers such as urea, ammonium nitrate and urea-ammonium nitrate. The Group's key markets are Russia, Brazil, Europe and the United States. Acron has two production facilities – Acron (Veliky Novgorod, Russia) and Dorogobuzh (Smolensk Region, Russia). Acron's logistics and transportation capabilities include its own fleet of railway cars and three sea port trans-shipment facilities on the Baltic Sea – at the Kaliningrad port of Russia, at the Estonian Sillamäe port and at the Estonian Muuga port. 2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) 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 size of Bank of China’s contribution and ICBC’s contribution to the loan syndicate is unknown. For the time being, AidData assumes equal contributions ($75 million) to the loan syndicate across the 10 participating banks.

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