JEDDAH – Bahra Advanced Cable Manufacturing Co. Ltd. secured $265 million Islamic financing from Standard Chartered Bank – $200 million for short-term Islamic structured financing for its inventory and sales (Warehouse & Export Invoice Structured Finance), and $65 million as a 5-years long-term loan for company's expansions.
The first facility is the first of its kind in Saudi Arabia.
Stephan Riekert, director, solution structuring team, transaction banking at Standard Chartered, said what’s unique is that the deal involves an Islamic (musawama) ownership structure that differs from standard forms where the inventory would be bought from the client and sold immediately with a deferred payment term.
He pointed out that under the scheme, the inventory is held and sold on behalf of the bank, which strengthened the bank's security position and eliminated an array of complexities brought about by a vanilla security structure.
He assured that while "musawama" is not new to the trade finance market in Saudi Arabia, the ownership structure of this facility, combined with the end-to-end purchase-to-sale financing capability makes this facility particularly innovative to the Saudi market.
Engineer Talal Idriss, CEO of Bahra Cables Company, said: "Getting such two facilities from an international bank like Standard Chartered is considered an international certificate and testimony of the company's position being one of the largest cable producers in Saudi Arabia, and confirms the approach and plans it follows since its foundation which successfully led the company to supply and participate in several mega projects inside and outside Saudi Arabia."
He added that the $200 million financing will help Bahra Cables to proceed forward in increasing its production and distributing in new markets, particularly after completing its related facilities such as the new fully-automated warehouse and the Chloride Poly Vinyl (PVC) production plant., while the second loan for $65 million would enable the company to go ahead with its expansion plans to meet the growing demand on its production of high-quality cables where the \company has obtained several quality certificates for its cable products such as KEMA, IPH, SASO, LPCB, CSA, BASEC and other certificates. The company, as well, is ISO 9001: 2008 certified for its medium and high voltage cables up to 132 KV.
Worthy to mention that Bahra Cables is the first Saudi cable manufacturer to receive ISO 14001: 2004 and OHSAS 18001:2007 certificates.
Bahra Cables is specialized in the production and distribution of electrical cables and aims to become the main developer for low, medium, and high voltage cables in Saudi Arabia. The company plans to expand its range of products through manufacturing of various copper products such as copper tapes and conductors to serve electrical manufacturing sector. The company has built advanced production lines to supply high quality products with the highest quality standards.
The company employs German technology in supporting all design, management and operations, and look forward to be a major contributor to the architectural boom in the region. – SG