Trader Gunvor raises $635 mln via Asian banks

Tue Jun 12, 2012 9:38am EDT

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* 15 Asian banks contribute to loan facility

* Gunvor says loan will help with Asian expansion

By Emma Farge

GENEVA, June 12 (Reuters) - Cyprus-registered commodities trader Gunvor said its Singapore branch had signed a $635 million loan agreement with mostly Asian banks, as trading houses look for new sources of capital amid a retrenchment by traditional European lenders.

European banks involved in commodity trade finance, such as market leader BNP Paribas, have cut back lending, under pressure from new rules requiring them to boost their capital and from a shortage of dollar liquidity.

That has left a gap in the market for Asian banks.

Gunvor, which has major offices in Geneva and Singapore, said on Tuesday the revolving credit loan facility would be used to refinance existing debt and to finance working capital requirements.

Chief executive Torbjorn Tornqvist said the financing would help the trader consolidate its position in Singapore where commodities trading is growing, partly due to booming demand from neighbouring China.

"By attracting such considerable confidence from local banks in the Asia-Pacific region, our Singapore regional hub Gunvor Singapore Pte Ltd has built a truly regional portfolio of support for our growth strategy," he said.

The one-year facility was backed by 15 Asian banks including China Development Bank as well as eight European and five Middle Eastern banks, it said.

Gunvor, co-owned by Russian tycoon Gennady Timchenko, is rapidly expanding its downstream business and has agreed to buy two European refineries from insolvent refiner Petroplus.

The retrenchment of some European banks has made it harder for small traders to gain access to credit although top commodities traders have been able to raise capital via loan facilities.

"It's no surprise - Vitol, Mercuria and Trafigura are good risk and they won't have trouble finding financing. However, the cost of these financings may have increased. Money isn't that cheap in today's environment," said a Geneva-based banker.

Rival commodities trader Mercuria said earlier in June it had raised the equivalent of nearly $2 billion via two loan facililties. (Reporting by Emma Farge; Editing by Mark Potter)

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