EFIC supports cattle breeding deal with Russia
Export Finance and Insurance Corporation (EFIC), Australia’s export credit agency, has provided a US$39.7 million export finance guarantee in support of contracts to purchase breeding cattle by the Bryansk Meat Company (Bryansk) from Australian suppliers.
Established with the support of the Russian government, Bryansk, part of the Miratorg group, is tasked with rebuilding the country’s breeding stock.
EFIC is providing the export finance guarantee to HSBC Bank plc (HSBC) in support of a loan from HSBC to Vnesheconombank, the Russian government-owned bank financing Bryansk’s purchase.
EFIC’s Executive Director, SME and Mid-Market, Andrea Govaert, said: “EFIC’s export finance guarantee facilitates Bryansk’s purchase of breeding cattle from Australian suppliers. “In doing so, this helps Australian suppliers compete with those from the United States as Bryansk considers breeding cattle from both countries to meet its quality standards.”
As part of EFIC’s support, the relevant Australian suppliers to Bryansk will be required to comply with Australian Quarantine, State, Territory, and Federal Government requirements including processes for the tracking of shipments by licensed exporters.
In assessing this transaction EFIC followed its normal due diligence processes, which included visiting Bryansk’s agricultural operations in Russia.
“In the past Russia has imported most of its breeding cattle,” said Victor Linnik, President of Agribusiness Holding Miratorg.
“Yet the climate and availability of open range land in the Bryansk area is perfect for raising cattle. With EFIC’s support Australia will make a significant contribution to our target of holding over 18,000 head of breeding cattle distributed across seven farms by the end of this year.”
Petr Fradkov, Deputy Chairman of Vnesheconombank, said that the bank had requested HSBC and EFIC to assist in the provision of finance because the commercial appetite for projects of this nature with tenors greater than five years is limited.
“We sought a longer tenor to reflect the term of the contract. EFIC’s export finance guarantee to HSBC enabled us to provide a loan to Bryansk for the term that it required,” said Mr Fradkov.
Export Finance and Insurance Corporation
Ph: 1800 887 588
www.efic.gov.au