Empowering Indian Textile Manufacturer’s Growth Through Collateral Transfer

Objective: Secure and guarantee an existing pre-approved commercial credit line to facilitate expansion.

Facility Secured: Collaboration with UAE Provider Group

• Collateral Transfer Facility: Secured a substantial €12 million
• Annual Contract Fee: Set at 5.85%
• Term: Extended to a strategic 36 months
• Deposit against Contract Fee: Established at €250,000

Client Profile: A promising Indian textile manufacturer seeking additional security to unlock a pre-approved credit line for distribution infrastructure expansion in Dubai.

Challenges:

1. Limited Security: Insufficient collateral to release the pre-negotiated credit line.
2. Limited Trading History: Trading for only a few years but possessed a robust order book.

Redeure’s Solution:

1. Strategic Financing: Obtained a Collateral Transfer Facility from a UAE Provider Group.
2. Demand Guarantee Issuance: The Facility enabled investment via a Demand Guarantee, serving as collateral.
3. Credit Line Utilization: The Guarantee, issued to the recipient bank in Dubai, became security for the pre-arranged credit line.

Results:

• Successful enhancement of creditworthiness for the client.
• Enabled the release of additional borrowings for infrastructure expansion.
• Established a pathway for the client to utilize their pre-arranged credit line with existing bankers.

This case exemplifies how Redeure’s Collateral Transfer Facility effectively addressed the challenges faced by a growing Indian textile manufacturer, providing them with the necessary financial leverage to embark on a strategic expansion plan in Dubai.