The Industrial and Commercial Bank of China (ICBC) recently granted the first offshore Renminbi loan facility to date, marking an important milestone in the internationalization of the Chinese currency.
Herbert Smith and its associated law firm in Indonesia, Hisawara Bunjamin and Tanjung (HBT), advised ICBC and its subsidiaries ICBC Asia and Bank ICBC Indonesia on the RMB2 billion (US$300 million) offshore export financing framework arrangement that was provided to Bakrie Telecom. The deal included the first commercial renminbi loan provided to a company outside China. The proceeds of the facility will be used by Bakrie to finance the purchasing of telecommunications equipment from the Chinese telecoms equipment provider Huawei Technologies.
ICBC is one of China’s “big four” state-owned banks and the largest bank in the world by market capitalization. ICBC Asia is a Hong Kong-incorporated licenced bank, while Bank ICBC Indonesia is an exchange-licenced
commercial bank in Indonesia.
This transaction received significant attention from the Chinese government. A signing ceremony held at ICBC’s headquarters in Beijing in August was attended by high-level dignitaries from the People’s Bank of China, the Ministry of Commerce, the China Chamber of Commerce for Import & Export of Machinery and Electronic Products, ICBC, ICBC Asia, ICBC Indonesia, Huawei and Sinosure, which provided export credit insurance. Among other Herbert Smith representatives, Clive Barnard, the head of the firm’s Asia finance practice, attended from London, as did Tom Chau, head of the firm’s Beijing office. The Herbert Smith team was led by Hong Kong banking and finance partner Alexander Aitken and senior associate Lui Kanyi, with support from the Beijing team, led by Chau. The HBT team was led by Herbert Smith partner David Dawborn and HBT partner Tjahjadi Bunjamin, assisted by Ibnu Fajar Ramadhan and Adrianus Adritomo.
