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Bahra Cables arranges Islamic financing for $265 mln from Standard Chartered [Mubasher (Saudi Arabia)]
[September 21, 2014]

Bahra Cables arranges Islamic financing for $265 mln from Standard Chartered [Mubasher (Saudi Arabia)]


(Mubasher (Saudi Arabia) Via Acquire Media NewsEdge) Building on the confidence and recognition Bahra Advanced Cable Manufacturing Co. Ltd. had with the local banks, the company added a new entry to its record of achievements by obtaining the confidence and recognition of international banks, where the company got an Islamic financing for the sum of US$ 265 million from Standard Chartered, out of which US$ 200 million for short-term Islamic structured financing solution for funding its inventory and sales, and US$ 65 million as a 5-years long-term loan to finance the company's expansions.



The first facility is a short-term structured Islamic financing to finance inventory and sales (Warehouse & Export Invoice Structured Finance) to finance the working capital of Bahra Cables Company and it is the first of its kind in Saudi Arabia.

In this regard, Stephan Riekert, director, solution structuring team, transaction banking at Standard Chartered, explained that 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 further pointed out that here 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.

Furthermore, he assured that while "musawama" is not new to the trade finance market in Saudi, 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.

Meanwhile, 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." Mr. Idriss added that the US$ 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 US$ 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, as well, 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.

The cables produced by the company, including high, medium and low voltage cables possess high specifications as being fire resistant, smoke-free and emission-free as it does not release poisonous emissions such as halogen in case of fire or short circuit.; All Rights Reserved - Mubasher Info (c) 2014 Provided by SyndiGate Media Inc. (Syndigate.info).

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