Pran may get Tk100cr IFC loan to support expansion

The country's one of the leading agro-processors Pran Group is likely to get about $ 15 million or Tk 100 crore loan from global private sector lender International Finance Corporation to support its big expansion programme.
According to the group, under a 3-yearly (2009-11) programme at a cost of $51.2 million, the production capacity of its 6 subsidiaries will be enhanced.
These subsidiaries are engaged in the business of beverages, culinary products, confectionery, dairy, snacks and premium rice.
“It's a huge leap for us. We will really be fortunate to get loan from such a reputed global lender,” a senior official of PRAN told The Daily Star.
Pran official made the remark after the IFC posted a summary in its website on the proposed investment of US$ 15 million (Over Tk 100 crore) in the Pran Group.
“Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision,” the IFC, however, said.
According to official, the tenure of the loan after approval is expected to be 5 years. It will be a foreign currency loan and the local company might have to pay between 3.25-3.75 as interest rate plus LIBOR (London Inter-bank Offer Rate) rate.
The Pran is expected to get the loan at a time when global currency market is experiencing volatility due to falling dollar.
“The main risk of taking foreign currency loan is exchange rate. But an exporting company may repay the loan easily as it earns foreign currency,” said a senior official of bank.
The over Tk 450 crore Pran Group, established in 1993, now enjoys leadership in various agro-processed products such as fruit drinks and confectionary. The group now exports its products to 70 countries, including African countries.
“We seek the loan targeting mainly an increase in export earning,” the Pran official said, adding that the company's target of export earning this year is Tk 150 crore.
Pran, which presently borrows from both the local and multinational banks, expects to get the loan in three phases with two instalments in every year following the approval by the IFC board.
“We expect the first instalment of the loan by the current year,” the official added.
The IFC hoped that the proposed corporate investment programme would support the continued growth of a leading Bangladesh's food company through enhancing capacity, improving operating efficiencies and exploiting domestic and export market opportunities.
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