EKF and PensionDanmark secure financing of large orders for FLSmidth
Collaboration between FLSmidth, Eksport Kredit Fonden (EKF) and PensionDanmark has secured Danish export orders worth DKK 350 million for a mining project in Armenia. PensionDanmark has now financed export contracts with a combined value of DKK 1.6 billion.
PensionDanmark is making DKK 350 million available through EKF financing so that the mining company Teghout CJSC can buy processing equipment from the Danish engineering company FLSmidth.
"We're killing two birds with one stone through our partnership with EKF. On the one hand, the partnership will ensure a return for our members well above the bond rate, and on the other hand it will help make more Danish export orders possible at a time when more traditional financing is difficult," said Torben Möger Pedersen, CEO of PensionDanmark.
Teghout CJSC is establishing a copper mine with the associated processing facilities in north-west Armenia. Production is expected to begin in 2014. The copper will be used in mobile phones, electric cables, etc.
"This is a strategically important contract for FLSmidth. There is stiff competition for customers, so we're delighted to be able to work with EKF and PensionDanmark to secure our customers' financing. In this case, the help with financing has allowed the Armenians to realise the project with FLSmidth's processing technology, which is the best in the world. This order from 2011 would not have been possible without a financial support scheme like this one," said Thomas Schulz, CEO of FLSmidth.
The financing agreement is conditional on the mining operations satisfying international environmental and safety requirements.
"We're naturally delighted to be able to enter into this agreement, which will increase Danish exports. And, what is more, for a project that is setting new standards for mining in Armenia. We have imposed a number of requirements, which will mean that the mine will be the first in Armenia to satisfy the international standards," said Anette Eberhard, CEO of EKF.
BNP Paribas Fortis acts as structuring bank of this EKF facility for the financing of the transaction.
This new export agreement means that since autumn 2011 PensionDanmark has financed Danish export orders worth a total of DKK 1.6 billion.