**Being the first bilateral financing for HSBC Amanah after amendment of VAT law in Murabaha** **Providing funds to finance the purchasing of Krakatau Steel’s raw material**
HSBC through its shariah division, HSBC Amanah arranged a USD 33 million murabaha financing (cost plus financing) facility for PT Krakatau Steel, the Indonesian state owned company and the largest integrated steel manufacturer in Indonesia and the Southeast Asian region. The financing facility which is solely funded by HSBC has been designed to finance Krakatau Steel’s raw material purchasing.
Rajeev Babel, Head of Global Banking HSBC Indonesia said, "We are delighted to announce this shariah financing facility with Krakatau Steel, which is one of our most valued clients in Indonesia. This transaction was facilitated by the recent amendment of VAT law which removes double taxation for murabaha transaction. Our first collaboration with Krakatau Steel, in shariah financing, was back in 2007 when we arranged their first USD 50 million murabaha syndication. Our multi-dimensional partnership with leading Indonesian corporates like Krakatau Steel and good understanding of the local regulatory framework clearly demonstrates the strength and diversity of HSBC's global banking franchise in Indonesia, "
Sukandar, Financial Director Krakatau Steel, said “This fund will be used to finance the purchasing of raw material from our supplier. Aside from its operational purpose, receiving this shariah financing facility is also being part of our strategy in diversifying our funding sources, both from conventional and shariah. We are hoping this effort could also support the development of shariah banking industry in Indonesia. Hence, we thanked HSBC Amanah for arranging this shariah based financing facility. We look forward to working with them in other areas where their value added services would benefit our institution, our customer as well as our stakeholders.”
Mukhtar Hussain, Global CEO of HSBC Amanah said, "We first launched our Islamic financial services in Indonesia in 2003 after looking closely at the developing market. This transaction demonstrates the ability of shariah finance to deliver financing solutions for corporates in Indonesia at a competitive price. As the first foreign bank to establish a shariah unit in Indonesia, HSBC is committed to accelerating growth of the local shariah industry through various initiatives. We are proud to have brought this deal to the market and look forward to concluding more shariah-compliant transactions in the country."
HSBC is the first international bank to establish a Shariah Banking Unit in Indonesia. After initially focusing on the corporate segment since its establishment in 2003, HSBC Amanah Syariah arranged two international Islamic financing syndications for PT Pertamina (Persero) of US$322 million (2004) and US$200 million (2006). These syndications successfully introduced Indonesia to the Middle Eastern investor. In 2007 HSBC Amanah Syariah arranged another international Islamic syndication for PT Krakatau Steel (Persero) of US$50 million, which won Murabaha/Trade Finance Deal of the Year 2007 by Islamic Finance News.
In March 2007, HSBC Amanah Syariah launched its retail banking services, becoming the first international bank to offer shariah retail banking services in Indonesia. In August 2007, HSBC Amanah Syariah opened its first full-fledged retail branch office, becoming the first international bank to operate a retail branch in Indonesia
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For further media enquiries please contact:
Devi Kusumaningtyas: +6221 3040 5394/ 0817 9947 935 or email to: devikusumaningtyas@hsbc.co.id
Source : http://www.hsbc.co.id/1/2/misc/media-release/hsbc-amanah-murabaha-financing-facility
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