Bangkok, Thailand, April 3, 2024 -- Indorama Ventures Public Company Limited, a global sustainable chemical producer, today announced it raised $255 million through a sustainability-linked Ninja loan with international financial institutions. The refinancing was achieved at lower spreads than the previous issuance in 2020.
The Ninja loan, which is a syndicated loan arranged in Japan for foreign companies, was arranged by Mizuho Bank, one of Japan’s largest banks. It features a bullet repayment schedule over five years to March 2029, linked to Indorama Ventures’ post-consumer PET input into recycling and Scope 1 and 2 GHG emission intensity targets. The transaction achieved margin savings against the previous issuance, and the proceeds will be used as part of the company’s program to refinance $750 million for 2024 and $400 million for 2025, to be completed in 1H24.
At a glance
- Company
- Indorama Ventures Public Company Limited
- Announcement
- Financing
- Location
- Bangkok, Thailand
Key figures
- Ninja loan
- $255 million
- Refinancing program for 2024
- $750 million
- Refinancing program for 2025
- $400 million
- March debenture issuance
- THB 10 billion
- Loan repayment period
- five years to March 2029
People
- DK AgarwalDeputy Group CEO and Group CFO
Products and programs
Under its IVL 2.0 business strategy, announced on 5 March, Indorama Ventures is strengthening its capital structure in a prolonged environment of higher interest rates by deleveraging its business and optimizing operations to enhance earnings. On 14 March, the company said it raised THB 10 billion through an issue of Thai baht-denominated debentures to institutional and high-net-worth investors at lower spreads than the company’s previous issuance in May 2023.
Mr. DK Agarwal, Deputy Group CEO and Group CFO at Indorama Ventures, said, “We are pleased to secure this successful refinancing, following our debenture issuance last month. These transactions reflect our stakeholders’ confidence in our financial stability and responsible management in a higher interest rate environment. Their support is instrumental to securing our liquidity needs, ahead of schedule, through a diversified financing approach.”
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Questions around this news
How much did Indorama Ventures raise through the Ninja loan, and how will it use the proceeds?
The company said it raised US$255 million through the loan. It plans to use the proceeds as part of a refinancing program covering $750 million for 2024 and $400 million for 2025. The release says that program was intended to be completed in the first half of 2024.
What are the repayment terms and sustainability targets for the loan?
The loan has a bullet repayment schedule over five years, running to March 2029. Its terms are linked to targets concerning the company’s use of post-consumer PET as an input to recycling and its Scope 1 and 2 greenhouse gas emission intensity. The release does not provide the numerical values of those targets.
What is a Ninja loan?
A Ninja loan is a syndicated loan arranged in Japan for a borrower from outside Japan. Syndication means multiple lenders participate in providing the financing, with an arranging bank coordinating the transaction. The term describes the loan’s market and arrangement structure; it does not, by itself, specify the interest rate, repayment schedule, or sustainability conditions.
How does a sustainability-linked loan work?
A sustainability-linked loan ties one or more financing terms to the borrower’s performance against stated sustainability targets. The targets may concern environmental or social outcomes, and the agreement specifies how performance is assessed and what happens if targets are met or missed. Unlike a loan restricted to particular projects, its proceeds can generally be used for broader corporate purposes.
Earlier from Indorama Ventures Public Company Limited
- ‘Waste Hero’ recycling education program delivers significant social value in Indonesia and the Philippines
- Indorama Ventures’ THB 10 billion debenture issuance draws strong interest from investors
- Indorama Ventures evolves its business strategy as it pivots towards structural shifts in the global chemical industry
- Indorama Ventures sponsors the Thai Amateur Weightlifting Association's 2024 activities and competitions
- Indorama Ventures continues to be a member of the DJSI World and DJSI Emerging Markets
