The Islamic finance deal between Bahra Advanced Cable Manufacture Company and Standard Chartered for $ 200 million received three awards from specialised financial magazines and websites including The Asset - Triple A Award, GTR Best Deals and Trade Finance.

The short-term financing will enable the company to take full and best advantage for utilising its assets, said a statement.

It would also help financing the inventory and sales of its production, which covers a significant share of the domestic market, it said.

The facility is a short-term structured Islamic financing to finance inventory and sales (warehouse and export invoice structured finance) to finance the working capital of Bahra Cables Company and it is the first of its kind in Saudi Arabia.

Stephan Riekert, director, solution structuring team, transaction banking at Standard Chartered, explained that what’s unique is that the deal involves an Islamic (musawama) ownership structure that differs from standard forms where the inventory would be bought from the client and sold immediately with a deferred payment term.

The inventory is held and sold on behalf  of the bank, which strengthened the bank's security position and eliminated an array of complexities brought about by a vanilla security structure, he said.

While ‘musawama’ is not new to the trade finance market in Saudi, the ownership structure of this facility, combined with the end-to-end purchase-to-sale financing capability makes this facility particularly innovative to the Saudi market, he added.

Talal Idriss, CEO of Bahra Cables, said getting two such facilities from an international bank like Standard Chartered is considered an international certificate and testimony of the company's position being one of the largest cable producers in Saudi Arabia, and confirms the approach and plans it follows since its foundation which successfully led the company to supply and participate in several mega projects inside and outside Saudi Arabia.

The financing will help Bahra Cables to proceed forward in increasing its production and distributing in new markets, particularly after completing its related facilities such as the new fully-automated warehouse and the Chloride Poly Vinyl (PVC) production plant, he added. - TradeArabia News Service