Azerbaijani biggest leasing company plans to use import-export financing

Business Materials 10 May 2011 18:52 (UTC +04:00)

Azerbaijan, Baku, May 10 / Trend I. Khalilova /

The Azerbaijani biggest leasing company - Joint Leasing plans to use the import-export schemes to attract long-term financing, Joint Leasing director general Elchin Ahmadov said.

"At present, there is the opportunity to use patterns of export-import financing to buy the Japanese and Korean equipment," he said. "We expect interesting proposals from the Chinese financial institutions, as there is a great number of Chinese equipment now."

He said that the export-import agencies have easier financing conditions. They have the opportunity to attract more long-term financing. This will allow the company to reduce the price in terms of leasing.

"Last year Japanese funding was used. About $1 million was drawn for 1,5 years under the guarantee of the International Bank of Azerbaijan (IBA). It allowed our company to reduce the interest rate for leasing operations up to 15 percent. Hitachi technique was bought through these funds.

"In the first case we had very little time," he said. "So, we were forced to use financing through IBA. In this case, when we need more money, there will be more time to implement the project. It will be possible to directly use the export-import financing."

Taking into account that shareholder of Joint Leasing is one of the largest banks in Azerbaijan - IBA, in this case its help is assistance plays a big role. "We try to use the available opportunities through the resources available to the International Bank and its partners - financial institutions in other world countries," he said.

"The company feels the need to raise funds for 3-5 years," he said. "But in reality it is now possible to raise funds for a maximum of three years, as financial institutions are not ready to provide funds for up to 5 years."

At present, the average rate on leasing financing are established by Joint Leasing to the amount of 19-20 percent, down payment - from 20 to 30 percent, and the period - up to three years. Last year, the rates hit 21-22 percent on average.

"Depending on the client's solvency and essence of the project, there is opportunity for more flexible financing terms," he said. "Decreasing in the rates aims to accelerate a portfolio. Moreover, there are opportunities to attract lower-cost resources for specific export projects."

As of April 1, 2011, leasing portfolio amounted to 29,5 million manat, increasing by 1.83 million manat compared to the same period of 2010.

The company financed the projects given the advance of money amounting to 42 million manat, with growth at 3.5 million manat during the year. The company signed 164 deals.

The financed projects covered such areas as construction, transport, food and light industries, trade and services.

Joint Leasing Company has been operating since June 14, 2007 as the legal successor of Azerlizing company. The founders of the company are British company Dolphin Leasing (52,3 percent) and the International Bank of Azerbaijan. The company's authorized capital hits 700,000 manat. Joint Leasing Company was established on the basis of the first leasing company of Azerbaijan - JV "Azerlizing", has been operating since 1999.

The official exchange rate is 0.7911 manat to $1.