KUALA LUMPUR: SK Nexilis Co Ltd (SK Nexilis), the world's largest copper foil producer, has established the first green syndicated term loan facility (green loan) through its Malaysian subsidiary - SK Nexilis Malaysia Sdn Bhd.
It was aimed to finance the construction of the company’s first overseas copper foil manufacturing facility in Sabah.
The RM2.3bil manufacturing facility has an annual production capacity of 50,000 tons which will increase SK Nexilis’ global production capacity by two times.
The copper foils produced will be exclusively used in electric vehicle batteries enabling sustainable, low-carbon mobility solutions in various locations including Korea, Malaysia, Poland and North America.
OCBC Bank (Malaysia) Bhd (OCBC Bank), acting in its capacity as green loan structuring adviser, has played a pivotal role in structuring the green loan and advising on the underlying Green Financing Framework to adapt to SK Nexilis’ ESG objectives.
OCBC Bank also acted as mandated lead arranger, facility and security agent, and joint lender, alongside AmInvestment Bank Bhd as mandated lead arranger and AmBank (M) Bhd as the joint lender.
Adhering to best practices, SK Nexilis also appointed Moody’s to issue a second party opinion report. The report certifies the Green Loan Framework to be in compliance with the green loan Principles.
The transaction reaffirms SK Nexilis’ commitment to sustainability and is aligned with the overarching sustainability objectives of its parent company, SKC Ltd, which is part of SK Group, one of the largest conglomerates in South Korea. SKC Co. Ltd earlier unveiled a group-wide initiative to achieve net zero by 2040 and RE100, which is an initiative to transition to 100% renewable energy utilisation in its operations, by 2050.
SK Nexilis Malaysia Sdn Bhd chief executive officer Shin Dong Hwan said, “The electrification of motor vehicles is essential for the decarbonisation of the transport sector which contributes approximately one-fifth of GHG emissions globally.
“As a global leader in innovation, the impact of our business decisions on the local economy and environment is immense.
“Our new manufacturing facility will not only facilitate the decarbonisation initiative, but also create job opportunities for the local talent network and provide traction for more investments to enhance the local supply chain development for electric vehicles.”
Shin added: “We are deeply heartened to be part of this ESG movement with our key financial partners as we transition towards a better, more sustainable future.
“The green loan is the culmination of efforts between SK Nexilis, SKC Co Ltd and SK Group, our relentless commitment towards ESG, as demonstrated by our net zero and RE100 initiatives, as well as the overwhelming support from the Malaysian government.”
OCBC Bank managing director, senior banker and investment banking head Tan Ai Chin said, “As a major electrical and electronics hub, Malaysia is well-positioned to develop a thriving local electric vehicle manufacturing base and ecosystem.
“SK Nexilis’ presence reinforces this ecosystem and supports the nation’s decarbonisation efforts. “We applaud SK Nexilis for the management’s foresight which places innovation and ESG at the core of its vision.”
Tan added: “OCBC Bank has also been at the forefront of the ESG agenda. We have been progressively driving change and have introduced effective financial solutions to encourage sustainable best practices in the local market.
“We are pleased to have played a pivotal role in this transaction, which exemplifies and attests to OCBC Bank’s efforts in driving the adoption of sustainable finance among our clientele base.”
