Deutsche Bank has signed documents for export credit agencies (ECAs) Sace of Italy and Germany’s Hermes for facilities worth €61mn for Tata Steel of India, part of the Tata Group, the largest private sector group in India.
The facilities part-finance the expansion of Tata Steel’s Jamshedpur plant from a capacity of 5mn to 6.8mn tons per year in response to the rapid growth in demand for steel in Asia.
This forms part of Tata Steel’s overall plans for organic and inorganic growth projects worth around US$11bn within the next eight years.
The ECA facilities were raised off the back of Tata Steel’s imports of supplies and services from Paul Wurth Italia of Italy and Outokumpu Technology of Germany.
The transaction marks Tata Steel’s return to the ECA market after a long break. By leveraging Deutsche’s relationship with Sace, Tata Steel has achieved a financing package unprecedented for an Indian corporate. This transaction demonstrates the keenness with which ECAs view the growth momentum in India and the opportunities it presents for their exporters.
Through this transaction, Deutsche has also facilitated the process of enlarging Tata Steel’s investor base.
Deutsche Bank’s Singapore-based head of structured trade and export finance for Asia (ex-Japan), Aarti Mehra says, “We are delighted to have contributed jointly with Sace to Tata Steel’s efforts to achieve terms that truly reflect their high credit quality. The current strength of the Indian economy is a great opportunity for corporates to establish their track record with the ECAs. Deutsche Bank has the experience and skills to facilitate just that.”