Related News

Banks must adapt to survive as commodity finance demand slumps

ECAs and banks forge US$2.5bn deal for Chile copper mine

Trafigura bags US$5.6bn European RCF deal

Olam brews up first ECA-backed transaction

Former Envysion executives charged over links to US$1bn nickel fraud scandal

BB Energy has closed its first digital borrowing base facility in Asia as part of a strategic partnership with the Singapore Trade Data Exchange (SGTraDex) and commodity trade finance platform Komgo.

The 364-day, US$210mn secured facility covers import finance as well as the funding of inventory, receivables, and hedging positions for the trading business of its wholly owned subsidiary, BB Energy Asia.

The deal was oversubscribed, having initially launched at US$150mn. Natixis CIB acted as facility and security agent, while the other participating banks were Abu Dhabi Commercial Bank, Apicorp, Arab Banking Corporation, Crédit Agricole CIB and MUFG.

Komgo acted as digital agent for the transaction. The deal’s participants used the Swiss fintech’s smart document solution, Trakk, as a one-stop, verifiable source for all syndicate members, removing the need for wet ink signatures and enabling paperless transactional drawdowns, mark-to-marketing, verification of signers, and processing of collateral in a digital format.

Meanwhile, using SGTraDex’s data highway, BB Energy exchanges essential documents through Komgo’s platform, streamlining borrowing base drawdown with financing banks.

“The facility is underpinned by a cutting-edge digital trade platform through our partnership with Komgo and SGTraDex, reflecting BB Energy Group’s commitment to transparency and operational integrity,” says Anbu Ramasamy, regional CFO for Apac at BB Energy Asia. “Embracing digitalisation is paramount to a strong governance and gives liquidity providers confidence to extend financing more securely and efficiently.”

This is the first transaction to be completed under a memorandum of understanding signed between BB Energy Asia, Komgo and SGTraDex in August, which the trio said at the time would “pave the way for an industry-wide shift to efficient, more transparent structured trade finance operations” and provide “unparalleled verifiability, fraud detection and risk mitigation capabilities”.

Launched in June last year, SGTraDex is a public-private initiative that seeks to connect ecosystem partners in the local and global supply chains via a common data infrastructure. Using APIs, it facilitates the mobility of information between various parties involved in trade, which otherwise would typically be unavailable or cumbersome to access – enabling them to detect issues such as the use of bogus documents or attempts by companies to fraudulently obtain financing twice from the same cargo.

“SGTraDex provides the essential data exchange infrastructure, ensuring security and interoperability, allowing all parties to be connected to the larger ecosystem in a more efficient and secure manner,” says Kelvin Ling, head of business development and operations at SGTraDex. “This is a significant development in the industry which showcases that digitalisation can bring about enhanced connectivity and foster trust and transparency in trade.”

The facility is the latest of several involving Komgo. In 2021, the fintech came in as digital agent on BB Energy’s first US digital borrowing base facility, worth US$500mn, which the trader topped up last month. Meanwhile, in May this year, it was involved in a US$175mn Asia Pacific energy transition borrowing base facility for commodities trader Mercuria, as well as a US$600mn facility in support of Gunvor Singapore’s Asian oil business.