The Export Finance and Insurance Corporation said Leighton reached its approved offshore leasing limits before turning to EFIC for assistance.
Accounting for EFIC’s direct loan, the total lease finance facility for Leighton is $US177 million, with $27 million or 15% provided by ANZ, a key relationship bank for Leighton.
“This transaction is a good example of how we have been able to respond to the tightening of credit conditions in the capital markets, and demonstrates that we continue to assist Australian exporters with projects with strong economic fundamentals,” EFIC origination and portfolio management executive director Peter Field said.
“EFIC’s direct loan facility will help the Leighton Group continue to compete effectively and confidently in the mining industry in Indonesia. They are already in a leading market position, and we are proud to be able to support them with their latest ventures.”
Leighton chief financial officer Scott Charlton said EFIC’s support will ensure the company is in a position to expand its mining services business in Indonesia and deliver on existing contracts.
He also said EFIC’s support recognised the fundamentals of Leighton’s business were strong.
There have been various media reports indicating Indonesia’s new mining laws, passed last year, could force foreign companies to renegotiate their current work contracts, with Leighton having at least $A2.86 billion of contracts in the country.
Leighton subsidiary Thiess Indonesia won a five-year, $A1 billion contract for two coal mine projects in East Kalimantan province in October last year.
In December, EFIC said it was looking to maintain lending operations during the global financial crisis.