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Turkey’sVestel Elektronik has closed syndication of a US$135mn letter of credit facility via mandated lead arrangers ABN Amro and Deutsche Bank AG, London. Both banks also acted as joint bookrunners and Deutsche Bank Hong Kong will be the issuing bank for the facility’s letters of credit.
The 364-day documentary LC issuance was established for the group of companies including Vestel Elektronik Sanayi ve Ticaret, Vestel Komnikasyon Sanayi ve Ticaret, Vestel Beyaz Esya Sanayi ve Ticaret and Vestel Holland.
The facility was significantly oversubscribed, despite the fact that the initial list of banks invited to the deal by the bookrunners represented just a part of demand currently prevailing in the bank market for Turkish assets.
Vestel Elektronik is a leading Turkish manufacturer of consumer electronics, digital products and white goods and had a turnover of US$3.3bn in 2004, of which 79% comprises exports, mostly to Europe. As a result of the export focus, the company has been able to gain a significant share of the European TV market and has become one of the leading Turkish exporters.
Lead arrangers are Calyon, Fortis Bank, HVB Group, ING Bank, KfW, RZB and Bank of
Arrangers are HSH Nordbank, Natexis Banques Populaires, Trkiye Garanti Bankasi and San Paolo IMI.
Banca di Roma is co-arranger.
Lead managers are Citibank International and LRP Landesbank Rheinland-Pfalz.
This financing will support Vestels growth prospects and strategic development, enabling the country’s leading exporter to produce higher volumes for strengthening its presence in export markets.
The facility is intended to meet Vestel’s seasonal requirements and partially refinance the US$150mn LC issuance facility signed in September 2004.
Vestel plans to return to the market via ABN Amro and Deutsche with a second facility of similar size in the first quarter of 2006. The facilities will serve to back-stop Vestel’s payment obligations under sale and purchase agreements with its suppliers, related to the import of goods for production, and will enable Vestel to improve its daily operational efficiency.
The transaction has introduced the company to some international banks for the first time, thus reducing its dependence on the local bank market. The commitments of the mandated lead arrangers and the participation of fourteen other leading international commercial banks in this financing are further evidence of the growing support for private sector corporates in Turkey, as well as confidence in the Turkish economy.