Citibank Korea to arrange syndicated loan for Solus Advanced Materials' investment

By Yoon Ja-young

Citibank Korea signed a syndicated loan agreement with Volta Energy Solution Canada (VES Canada), a local subsidiary of Solus Advanced Materials on Nov. 25, to support the company's copper foil business in North America.

Citibank Korea headquarters in Seoul / Korea Times file

According to the bank, it arranged a $200 million syndicated loan as the sole coordinator, based on the overseas investment insurance of the Korea Trade Insurance Corporation (K-SURE) and financing of Export Development Canada (EDC).

This is the second syndicated loan arranged by Citibank Korea for Solus Advanced Materials, following the first one secured for its investment in the construction of a copper foil manufacturing facility in Hungary with K-SURE insurance coverage. Of note, this deal was completed through joint support from export credit agencies of Korea and Canada.

As the sole copper foil manufacturing facility to be built in North America, the facility will mass produce copper foil to supply about 540,000 EVs per year in a 129,700㎡ area located in Quebec, Canada, starting in the 2nd half of 2024.

This syndicated loan helps Solus Advanced Materials make further inroads into the North American markets by ensuring a stable supply of materials for Korean EV batteries and EV makers looking to enter into the North American markets. In particular, the deal will support rapid overseas production facility expansion of Korean EV makers facing a risk of being excluded from tax credits for EVs unless they use more than a certain ratio of battery components produced in North America due to place of production requirements under the Inflation Reduction Act (IRA).

In addition, this financing is supported by both export credit agencies from Korea and Canada, creating an opportunity to reinforce cooperation and coordination in the supply chain.

"We are delighted to support Solus Advanced Materials' overseas expansion with K-SURE, which is the partner of MOU signed with Citi to support Korean companies' exports and overseas expansion in February 2021,” Citibank Korea CEO Yoo Myung-soon said.

“This is a meaningful deal as it demonstrates the ESG management practices of both institutions. Based on our global network, Citi will proactively support Korean companies to expand overseas and become leaders in the global market,” she noted.