CAL FIRM SCORES CHINA EXPORT LOAN
UKIAH - 08/29/07 - Retech LLC, a manufacturer of advanced thermal-processing equipment, will use a $20 million working capital loan guarantee from the Export-Import Bank of the US (EXIM) to export its metals-processing equipment to Baoshan Iron & Steel Co. Ltd. of Shanghai, China.
The working capital guarantee was approved last week by EXIM's board of directors.
The guaranteed lender, United Commercial Bank of San Francisco, is providing the loan facility to support three export contracts of Retech Systems with Baoshan.
Retech Systems will manufacture an electron-beam furnace, a plasma-arc melting furnace and a plasma welder, for three Baoshan contracts.
The equipment will be used to produce titanium ingots, which will be used to manufacture products for a wide range of industries.
Titanium is a metal valued for its strength, light weight, and corrosion and heat resistance.
The California-headquartered company will receive advance and milestone payments from Baoshan during the equipment-manufacturing period.
The EXIM-guaranteed loan facility from United Commercial Bank will be used primarily to enable Retech to issue standby letters of credit to Baoshan as prepayment guarantees.
The loan facility will also be used by Retech Systems for other working capital needs related to the Baoshan contracts.
Retech Systems has been developing and manufacturing custom-designed processing equipment for the titanium and specialty-metals industries since 1963.
The company is considered a market leader in sales of large-scale electron-beam and plasma systems. Export sales to 16 countries account for more than 50% of the company's total sales volume.
The company recently expanded its workforce to 100 workers, most of whom are employed at its manufacturing plant in Ukiah in Northern California.
United Commercial Bank, a subsidiary of UCBH Holdings Inc., specializes in facilitating trade deals between US small- and medium-seized businesses and business partners in China and the Pacific Rim region.
EXIM’s Working Capital Guarantee Program is an asset-based lending program for US exporters that guarantees working capital loans based on inventory and accounts receivable related to exports.
The bank guarantees 90% of the working capital loan, including principal and interest, and can cover either a single loan or a revolving line of credit that can support several export transactions.
In fiscal year 2006, EXIM authorized a record $1.2 billion in working capital financing. Almost 89% of the total number of EXIM’s working capital transactions in fiscal year 2006 supported US small businesses.
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