denotes premium content | Jan 6 2009 
Feature
posted 23 Feb 2005 in Volume 8 Issue 4
Thang Long Cement, Vietnam: First on all fronts
MLA: BNP Paribas
Borrower: Vietnam Machinery Installation Corporation (Lilama)
Buyer: Thang Long Cement Corporation
Deal size: €128m ($165m) split into two commercial-loan facilities and two export-credit facilities
ECA: Euler Hermes
Tenor and payment schedules: three-year drawing plus ten years repayment
Signing, closing and disbursement dates: contract signing – 9 October 2004; signing of credit agreements – 19 November 2004
This transaction boasts a list of firsts as long as your arm. Excluding aircraft financings, it is the biggest export financing ever realised in Vietnam and the first that covers 100% of the imported portion underwritten by one financing institution. This means it is the first non-asset-based commercial loan to be set in Vietnam.
It also demonstrates a first for German ECA Euler Hermes – the deal is its biggest financing in Vietnam to date. It is the first buyer credit ever signed by the borrower, Lilama, and the first time a joint stock company (JSC) owned by stated-owned and private corporations has received a loan from non-Vietnamese banks.
The commercial contract was signed in record time after only a few months of negotiations on 9 October 2004. Signing was achieved just 40 days later on 19 November 2004, making it one of the fastest negotiations ever realised by BNP Paribas for a loan over u100m. Claudia Belli, manager of the export finance Asia-Pacific division at BNP Paribas in Paris, says: “People are always saying everything takes such a long time in Vietnam but this is an excellent demonstration of how signing can be achieved very quickly when necessary.”
BNPP has been investing heavily in Vietnam and has been working hard to increase its presence. It is currently bidding for a number of cement-plant projects. “This is our biggest deal in Vietnam,” says Belli. “It is the first credit given to a project developed by a JSC, which of course is important for Vietnam because the state has started to give more importance to JSCs who should in the future be the sponsors of more of these projects.”
Lilama will develop the Thang Long cement plant through a JSC with private company, Geleximco. The German supplier Polysius will provide a grinding station and a full cement plant to the Thang Long Cement Corporation. It is the first time a JSC has received funds from an offshore bank for a project it’s developing.
