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New Silk Road Finance Awards

Southeast Asia: Best Individual BRI Project or Initiative in the Region 2020

Sunrise Group’s inaugural $35 million investment in Cambodia to fund a new metal packaging facility

This wasn’t the biggest Belt and Road transaction on the table this year in southeast Asia – far from it. China does a lot of business in the Asean region, much of it in the shape of big-ticket oil and gas, mining, transport and telecoms deals.

But packaging firm Sunrise Group’s $35 million deal in Cambodia stands out for several reasons. Formerly known as Shengxing Zhongguo, the Fuzhou-based firm’s relationship with Bangkok Bank began in 2006.

When Sunrise – listed in Shenzhen and with 19 production bases scattered across China – set out to diversify into the Asean region with the aim of opening a metal packaging plant, the Thai lender was there.

Metal can production in Cambodia was a virtual monopoly dominated by one company, Crown. Sunrise wanted to break its hold on the market.

To that end, the Thai lender and its local unit, Bangkok Bank Cambodia (BBC), structured a club financing deal worth $35 million, and provided investment and financing advice to a firm making its first foray into the country.

The parent bank provided $20 million in offshore financing, with BBC stumping up $15 million in onshore financing, including $5 million of working capital.

It marked the first completed offshore loan by BBC, which also acted as security agent for the offshore assets, and oversaw the deal’s tax and legal structures. Bangkok Bank hopes the transaction will serve as a template for future outbound financing deals in the region, led by China companies.

It is also worth mentioning that in the case of enforcement proceedings having to take place, the lenders would resolve any dispute in a Chinese court, rather than via an international tribunal.

For its part, Beijing is keen to ensure that more disputes relating to Chinese business interests, including BRI deals, are heard onshore.

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