SINGAPORE — Agrocorp International along with FMO, the Dutch entrepreneurial development bank, and Rabobank have signed a $50 million committed sustainable borrowing base facility.
“We are happy to have finalized this facility with FMO and Rabobank and are confident that this will be an important stepping stone to further growth and cooperation,” said Vijay Iyengar, chairman and managing director of Agrocorp. “It is especially commendable that this facility was closed during these turbulent times and we are grateful for the trust that both Rabobank and FMO have placed in us. We are also excited about the sustainability covenants and are well placed to meet them, not just for the lending part of the facility, but more so because sustainability is an important focus area for the company.”
The new loan by FMO and Rabobank is Agrocorp’s first borrowing base facility. The facility is split into two equal tranches with FMO covering prepayments and inventory and Rabobank financing receivables. Rabobank also will take on the role of the facility agent. As part of the facility, Agrocorp will be working with a consultancy firm, Earth Systems, to set and monitor sustainability targets and reporting requirements. Agrocorp also will be working with FMO to establish farmer training programs in markets such as Myanmar where it has a strong presence.
The overall goal of the loan is to enhance food supply chains in developing markets. As a global supply chain company, Agrocorp has been working to keep the flow of food going during the global coronavirus (COVID-19) pandemic, particularly where lockdown measures have caused food insecurities and price increases.
Over the past month, the company said it has increased its efforts to execute business via blockchain solutions that digitized trade documents, to ensure intercontinental agricultural trade could take place when flights and courier services upended.
“We are delighted to have the opportunity to work with Agrocorp and FMO, both highly reputable firms,” said Harjan Kuiper, chief executive officer of Rabobank Singapore. “This new working capital facility will enable the client to implement a more sustainable food supply chain in emerging countries. Even more so in times like these, where food supply chains are challenged, access to capital is critical. As the premier global Food & Agri bank, this facility fits perfectly with our cooperative mission of ‘growing a better world together.’ Our knowledge, network and financial product offerings enables us to further encourage our clients to implement a more sustainable food supply chain.”
Agrocorp International is a Singapore headquartered supply chain company that specializes in agricultural commodities and food products such as wheat, soybeans, cotton, pulses, edible nuts, rice and sugar. It was started in 1990 and has grown to handling more than 12 million tonnes of product.
Follow our breaking news coverage of the coronavirus/COVID-19 situation.