Shot in the arm for Kazakh clinic
In a deal that illustrates significant progress for the Czech Republic’s Komerční banka (KB) in terms of acceptance and reputation in Kazakhstan, the bank closed a dual-tranche, part Czech ECA-backed finance facility to enable the delivery and assembly of medical equipment for the TOO Privatclinic Almaty in Kazakhstan.
The deal is structured as a two-year uncovered commercial loan for a lump sum down-payment of US$1mn, and an Egap-covered loan for US$6mn with a seven-year tenor. It provides financing of 85% of the contract amount, plus a 100% Egap insurance premium for a seven-year term under a buyer’s credit covered by the ECA.
Low pricing was secured for both facilities despite the lack of liquidity in the global market following the sub-prime crisis.
The flexible structure of the financing allows for a sufficient period of grace under the commercial facility (one year), as well as a standard six-month grace period under the ECA-backed facility.
At the onset, the importer – TOO Privatclinic Almaty – approached Halyk Bank to arrange financing for the delivery and assembly of high-tech medical equipment. The transaction would involve financing equipment imports partially produced and bought in the Czech Republic. Halyk Bank turned to KB to secure funding for the deal to on-lend to the importer. As such, the clinic was provided with the desired term and appropriate structured financing.
“Under the terms of the project, KB issued an advance payment guarantee in favour of the Kazakh importer, to cover the advance payment being provided by the Kazakh bank. Halyk Bank also issued a letter of credit in favour of the Czech exporter, Puro-Klima,” says Jana Svabenska, director division trade and export finance at KB. Close co-operation was achieved between KB and Halyk Bank to harmonise all knowledge and expertise available to finalise the loan documentation and disbursement schemes acceptable to the borrower and its client.
“KB spent much time finding the most optimum financing structure, and in the end, the bank was able to offer its client the most competitive and complete solution to facilitate this transaction,” she adds.
Halyk Bank considers the deal important for two major reasons. “First, the bank made a contribution to the project in one of the strategically important industries of the real economy sector – medicine,” says Umut Shayakhmetova, chairperson of Halyk Bank. She adds that the equipment purchased by Privatclinic is in high demand in Kazakhstan, and will further improve the quality of medical services and create better working conditions for the clinic’s personnel.
“Second, even though the deal was a primary experience in trade finance business with the Czech Republic for Halyk Bank, its exposure was well received – both by Egap and KB.” The bank hopes that this will induce future co-operation with the Czech party.
Borrower: Halyk Bank
Importer: TOO Privatclinic Almaty Amount: US$7mn
Lender: Komerční banka (KB)
Law firm: Markta Krslov
Tenor: First tranche: 2 years; second tranche: 7 years
Date signed: First tranche: October 2008; second tranche: November 2008