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Fonterra Sets Up $300MIL Bank Facility With Bank Of China NZ
December 15, 2016

Fonterra has set up a $300 million bank facility with Bank of China New Zealand which the co-operative says will provide greater flexibility in how it funds its Chinese operations.

Bank of China established a branch in New Zealand two years ago and supports New Zealand companies in China and Chinese firms and investors entering New Zealand.

Fonterra said the facility, believed to be the first of its kind in New Zealand, included a Chinese currency component.

Fonterra chief financial officer Lukas Paravicini says the facility will help fund its operations in China.
Fonterra chief financial officer Lukas Paravicini says the facility will help fund its operations in China.

Bank of China chief executive David Lei Wang said annual trade between New Zealand and China had almost tripled to $23 billion since the Free Trade Agreement was signed in 2008.

“We see great opportunities in developing more renminbi (RMB) products and tapping into China’s debt capital markets on behalf of New Zealand financial institutions and government agencies,” Wang said.

Fonterra’s chief financial officer, Lukas Paravicini, said the new debt facility underlined Fonterra’s focus on building an integrated business in China.

“Bank of China has strong liquidity in renminbi and its local presence and knowledge offer us additional benefits in the rapidly developing Chinese financial markets,” Paravicini said.

The facility did not mean Fonterra was taking on more debt but offered alternatives and increased diversity in RMB funding sources, Paravicini added.  Bank of China is one of the top four banks in China, and the top five banks globally.

By: Gerard Hutching
Source: Stuff.co.nz


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