Xiaomi

Xiaomi - LC

Borrower (s)
Xiaomi
Industry
IT and telecoms
Area of finance
Trade Finance Guarantees/Loans
Region
Asia Pacific
Countries
China

Deal Overview

Xiaomi is committed to leverage its scale and efficiency to drive a more sustainable economy to support its users, employees and the planet. Xiaomi is also fully committed to green initiatives especially to supply chain management. The Green Finance Framework is the guideline to all of...

show more

Xiaomi is committed to leverage its scale and efficiency to drive a more sustainable economy to support its users, employees and the planet. Xiaomi is also fully committed to green initiatives especially to supply chain management. The Green Finance Framework is the guideline to all of Xiaomi’s financing activities. 

Being the largest mobile phone manufacturer, securing reliable supply of mobile chips is critical to maintain Xiaomi’s leadership position. Given global shortage in chips’ supply in recent months, Xiaomi has identified a strategic partner and IC supplier in Taiwan. 

Santander approached Xiaomi at the perfect timing and provided a solution which: 

i) supports its liquidity needs in the prepayment funding; 

ii) advance payment to the supplier on a non-recourse basis; 

iii) flexibility to extend the financing to second year, subject to mutual consent. 

Santander was the first bank providing a Red Clause LC structure to Xiaomi and Xiaomi senior management was impressed with Santander’s responsiveness, structuring capability and execution within one month. Subsequently, the same structure is able to replicate to other suppliers. 

Xiaomi commented that Santander is one of the banks who gave prompt and comprehensive solutions. This Red Clause LC is simple and easy to implement in terms of structure and documentation. The implementation is incredibly smooth. Santander team gave a perfect answer to Xiaomi. Xiaomi has the confidence to achieve their goal, and bring best products to their clients. 

 Implications from the deal:

Supporting Xiaomi to secure reliable supply of mobile chips through a red clause LC structure. 

Letters of Credit structure which is familiar and well received by Xiaomi and the supplier

Red Clause mechanism allows for the prepayment to the supplier before delivering the goods.

Secure the long-term supply of key components and stabilize the mobile manufacturing

Xiaomi sees Santander as a reliable partner to provide supply chain solutions with innovative ideas that fits their business needs

show less
Deal Volume
$140m
Financial Close
01 September 2021
Sources
Submitted by participant(s)

All Dealmakers

None yet provided
Tag yourself

Tranches


To view all tranche and pricing information, please sign up or log in