Deutsche Bank today announced that it has provided a USD30 million structured trade finance facility to PT. Huawei Tech Investment, a wholly-owned subsidiary of Huawei Technologies Co. Ltd. (‘Huawei’), in Indonesia for the sale of equipment to a local broadband company.
With a tenor of three years, the facility was secured by the issuance of promissory notes from the buyer resulting in non-recourse to the seller. In addition, by having the ability to convert their Account Receivables into cash, Huawei will be able to better utilise its working capital.
Employing close to170,000 employees, Huawei is one of the leading players in the global telecommunications market. The company’s contract sales reached CNY288 billion in 2014*.
Suman Chaki, Head of Working Capital Advisory, Asia Pacific, Global Transaction Banking at Deutsche Bank, said: “Supplier financing is increasingly being considered by corporates seeking to improve their balance sheet at lower costs. This innovative structured trade finance solution enabled Huawei to negotiate more favourable terms in their existing contract with their client.”
Zhou Feng, Finance Manager, Sales Financing Department at Huawei, said: “Deutsche Bank was able to put together a well-structured bridge financing solution for our medium term contract with a local broadband company in Indonesia. With the resulting lowered costs of financing, we plan to continue to expand our business in this key market.”
* Source: Huawei, 2014