Steel Plant to China

Type of Deal: Export Project Financing
Deal Size: $10,000,000
Funding Requested: Cash Funding

A hedge fund introduced King Trade Capital to a iron and steel equipment supplier located in Pennsylvania. The hedge fund forwarded the lead to KTC because of KTC’s funding capacity and expertise in quickly structuring and funding transactions.

The equipment supplier came to KTC with the opportunity to purchase and resell a large steel rolling plant to a buyer in China. The sale of the plant was secured by a letter of credit issued by the Bank of China and confirmed by the Bank of New York.

Our client’s business had been thriving but they had a limit on their ability to get traditional bank financing. For this opportunity, they did not have the capital to purchase the steel plant and needed KTC’s help. The client’s need was to have the cash to purchase the plant, break it down, containerize and ship all the equipment and parts.

KTC entered with a solution. We quickly used our market knowledge to learn about the client and the transaction. The client, having been in business since 1983, had an excellent track record with many years of experience in supplying steel equipment, as well as re-engineering and refurbishing steel plants. KTC was able to assess the client’s ability to perform and implemented a secure structure and was able to close the transaction within two weeks.

In addition to quantifying the client’s ability to perform, KTC also confirmed all costs associated with the purchase, dismantling and shipping of the plant, arranged direct payment to the owner of the steel plant, and took an assignment of proceeds under the letter of credit issued by the customer in China as a form of direct repayment.

Because of our client’s ability to quickly purchase the steel plant and ship the equipment, the end customer in China has hired our client to help engineer and build the balance of the steel plant in China. A $10,000,000 opportunity has turned into a much larger opportunity for our client.