The Bangladesh arm of the British multinational banking and financial services holding company, Hongkong and Shanghai Banking Corporation Limited (HSBC), has arranged US $ 46 million in low-cost foreign currency for Viyellatex Group.
The company is one of the leading readymade garment exporters of Bangladesh. It will spend the funding on a new spinning mill project. This was stated in a press communiqué issued jointly by HSBC Bangladesh and Viyellatex Group.
The financing, a combination of export credit agency-backed lending and commercial term loans, was incorporated for the Viyellatex Spinning Limited to support the purchase of machinery, equipment and technology from multiple suppliers based in Germany, India, Japan, Switzerland and the UK.
“This transaction highlights HSBC’s leading position in Export Credit Agency (ECA) financing in Bangladesh, and demonstrates the growing relevance of ECAs for the local private sector,” underlined Francois de Maricourt, CEO, HSBC Bangladesh, adding, “It also demonstrates the strength of HSBC’s international network and global banking capabilities.”
According to the press release, this is the country’s first ever private sector agreement with Swiss Export Risk Insurance SERV, Switzerland’s export credit agency.
The loan agreement under this development covers around 70 per cent of the total investment being made for the project, while the Viyellatex Group is providing the rest from its own fund.
“Interest rate of the loan is much lower than other US Dollar loans in the international market; therefore, Viyellatex Group is grateful to HSBC Bangladesh and at the same time proud to receive this international financing package,’’ maintained Viyellatex Group Chairman KM Rezaul Hasanat.
The spinning mill has already been constructed and commercial production will start after the forthcoming Eid-ul-Adha, a company insider informed.
Equipped with 92,000 spindles, the spinning mill is expected to produce 50 tonnes of yarn per day to meet the growing demand in the local as well as international market.
