Major loan of €7.5 million extended by Garanti BBVA to Romania's prime paper tissue manufacturer, fostering eco-friendly expansion.
Fresh Take:
Garanti BBVA extends a whopping €7.5 million loan to MG Tec Industry, Romania's leading paper tissue producer, with a helping hand from Exim Banca Romaneasca. This funding, covering up to 75% of the loan amount thanks to a state guarantee, showcases the power of state guarantees in nurturing local businesses in Romania.
Both Garanti BBVA and MG Tec Industry share a passion for sustainability. MG Tec's production cycle boasts a robust recycling component, and Garanti BBVA has been backing eco-friendly projects for quite some time.
"We're proud to support the local economy and help local producers enhance their facilities to gain a competitive edge in their sustainable growth and international expansion," said Bilge Demirer, Deputy General Manager at Garanti BBVA.
Traian Halalai, President of Exim Banca Romaneasca, adds, "State guarantees like these are vital when seeking financing, as they provide a secure and swift resource for companies through commercial banks. It's crucial that other banks follow suit, as Garanti BBVA's actions here will positively impact Romanian businesses."
PCF Investment Banking headed up MG Tec Industry during the financing transactions' struктуering, negotiation, and implementation. Mihai Iordan, the bank's Managing Partner, expressed his satisfaction with the arrangement.
Since 2019, MG Tec Industry has invested over €120 million in a state-of-the-art Romanian facility, covering 65,000 sqm and producing a diverse range of products for both local and international markets. The factory incorporates cutting-edge technology, with a keen focus on recycling practices, underscoring its commitment to sustainability.
Garanti BBVA Romania is dedicated to utilizing its resources and expertise to help customers tread the path to sustainability by offering customized financial solutions and personalized products. Their growth strategy is grounded in integrating ESG principles into their business decisions, ensuring long-term value creation and responsible development.
This press release.
State guarantees play a significant role in promoting local business growth in Romania by diminishing lender risk and easing access to finance. The €7.5 million loan extended by Garanti BBVA to MG Tec Industry (Romania's preeminent paper tissue producer), secured by a state guarantee from Exim Banca Romaneasca covering up to 75% of the loan amount[1][3][5], illustrates this mechanism's effectiveness:
- Risk Mitigation: State guarantees absorb a considerable chunk (up to 75% in this instance) of the default risk, enticing banks like Garanti BBVA to extend loans to businesses that might otherwise appear too risky[1][5].
- Improved Loan Terms: By curbing lender exposure, guarantees empower businesses to secure larger loans or lower interest rates, as seen in MG Tec's funding for operational expansion[1][3].
- Economic Priorities: The Romanian government strategically employs guarantees via EximBank to aid key sectors (such as manufacturing) and job creation, aligning with national economic objectives[1][3].
This model boosts credit accessibility for small-to-medium enterprises (SMEs) while instilling confidence in high-value projects among lenders. Similar strategies are adopted globally, as illustrated by MIGA's guarantees for international projects, although Romania's approach prioritizes domestic industrial growth[2].
State guarantees promote local business growth by reducing lender risk and facilitating access to finance, as demonstrated by the €7.5 million loan [1][3][5] Garanti BBVA offered MG Tec Industry. This guarantee from Exim Banca Romaneasca covered up to 75% of the loan amount, showcasing risk mitigation [1][5]. This arrangement enables businesses to secure larger loans or lower interest rates, enhancing operational expansion, as illustrated in MG Tec's case [1][3]. State guarantees reflect Romania's effort to prioritize national economic objectives and aid key sectors like manufacturing, fostering job creation [1][3]. Similar strategies are applied globally, with organizations like MIGA providing guarantees for international projects, while Romania concentrates on domestic industrial growth [2].
