Business News of 2014-05-21

HFC Bank unveils $70 million credit

HFC Bank, in partnership with Afreximbank and Renaissance Africa Group, has unveiled a $70 million syndicated revolving credit for the mining, and oil and gas sectors.

The facility, which has 36 months tenor at 4.5 per cent interest rate, is to help finance the operations of the mining support services providers at flexible terms.

Mr Asare Akuffo, Managing Director of HFC Bank, speaking at the launch noted the $70 million revolving credit has a flexible financing structure for beneficiaries to utilise by way of cash advances to pre-finance their contracts with the mining, and oil and gas companies.

He said beneficiaries of the facility could also access letters of credit issued by HFC as well as issuance of guarantees on their behalf. He said the facility is primarily for Ghanaian companies in the mining, and oil and gas supply chain with a modest interest rate.

Mr Asare Akuffo also stated that despite the downward trend of gold prices which may lead to mining companies adopting various strategies to cut-down production and operating costs, they would still require inputs at any level of production.

He said with the steady growth and expansion in the oil and gas sector, there is the need to support service providers. We believe therefore that this facility has been provided at a very opportune time for both the relevant industries and the supply chain operators. More importantly, it will also add meaning to the much touted local content agenda, he added.

Mr Asare Akuffo noted that HFC Bank is happy to be the first financial institution in Ghana to provide the focused facility to the mining, and oil and gas sectors.

He said apart from fulfilling the banks medium to long term strategic objectives in exploring opportunities in the mining, and oil and gas sectors, the facility would also give a boost to Ghanaian companies in particular who had difficulties in taking advantage of the opportunities in this lucrative sector.

Mr Osei Asafo Adjei, Executive Director/Corporate Banking at HFC Bank, making a presentation on the facility said it is one of the most flexible for the supply chain operators in the country.

He said the minimum that a company could borrow from the credit facility is $500,000 and the maximum $20 million with a tenor of 36 months. He explained that the bank would provide a standby guarantee to beneficiaries of the facility, which are more favourable.

He said beneficiary companies of the credit facility must have operated in the sector for three years, adding that a non-Ghanaian company proving support services and employing Ghanaians could also benefit.