HSBC, the Italian Export Credit Agency (SACE), and Vietnam’s Nutifood Nutrition Food Joint Stock Company (Nutifood) have just completed the arrangement of a US$31-million five-year untied offshore “Push” facility, the first of its kind in Vietnam and ASEAN.
|Inside Nutifood's plant. Source: Nutifood|
The deal is aimed at supporting Nutifood’s capital expenditure and working capital including investments in new warehousing and the replacement of four existing filling lines for dairy manufacturing, while SACE provides the guarantee that covers 80% of the loan.
This is the first SACE Push concluded in both ASEAN and Vietnam and in the food industry, “highlighting the strategic ongoing cooperation between HSBC and SACE to close transactions in priority markets,” stated the HSBC.
The facility also offers Nutifood access towards long-term hard currency financing, supporting its growth and investments in the local and international milk market. HSBC acted as Sole Mandated Lead Arranger, Lender, and Agent.
The Push program which was launched in 2017 is a SACE's initiative. With the aim of boosting the bilateral trade between Vietnam and Italy, SACE proactively searches and connects buyers and suppliers in both countries.
Through the scheme of Push program, SACE can provide the guarantee for financing up to 12 years for foreign corporates with no limits regarding the nature of the goods and no requirement for available contracts between buyers (borrowers) and Italian suppliers.
Joining Push program, buyers’ access to funding could be easier thanks to SACE’s financial guarantee, simultaneously, they can enjoy SACE’s economic incentive once the target amount of procurement from Italy is reached within an agreed period from the signing of the facility, as well as join SACE’s match-making events twice per year, increasing opportunities to find suitable business partners.
“This landmark transaction between Nutifood and SACE, the first of its kind in ASEAN and Vietnam and the second in Asia, underscores our ability to connect Vietnamese corporates with international experts leveraging our global network, and supporting the growth of Vietnam”, says Stephanie Betant, Head of Wholesale Banking, HSBC Vietnam.
“We are particularly thrilled to find innovative sources of financing for our customers and identifying optimal methods to access funding. We expect this historic transaction to increase bilateral trade between Italy and Vietnam.”
Key to this transaction is the agreement with Nutifood to foster its commercial relationships with Italian companies to increase Group’s procurement from Italy in the following years.
“Through HSBC we had the opportunity to work with SACE, and this also gives us the chance to access advanced technologies offered by Italian companies. We are extremely honored to be part of this deal and we are committed to using the allocated capital effectively to deliver sustainable development for Nutifood. We hope this will be the first step for us to cooperate in other projects in the future”, stated Huy Vo, Group CFO, and Chief Accountant, Nutifood.
“We are proud to have concluded a new Push Strategy deal, another major contribution to the growth of Made in Italy, one of the main drivers of the Italian economy. Since the launch of the Push Strategy program, we have mobilized resources for over EUR2.8 billion, supporting Italian SMEs in their business with large buyers in emerging markets”, said Livio Mignano, Head of International Network, SACE.
Since the inception of the “Push program” in 2017, HSBC arranged eight “Push” facilities and together with SACE is currently evaluating new opportunities in South East Asia ranging across several sectors like Agribusiness, Power, Petrochemicals and Furniture Manufacturing and for an overall amount of around US$800 million.
The triparty transaction between HSBC, SACE, and Nutifood is the second export credit agency (ECA) deal HSBC arranged for a private company, after the first one for VinFast - Euler Hermes Covered Loan in 2018.