Berger Paints has stepped in to help its operations in Bangladesh obtain letters of credit (L/Cs) that have become increasingly hard to come by as the south Asian country struggles with a continuing foreign currency crisis.

The L/Cs become available after the multinational paint manufacturer announced on 15 June that it had received approval from the Bangladesh Investment Development Authority to obtain a US$60 million loan from its UK-based parent company, J&N Investments (Asia) Limited.

Shareholders' loan

Berger Paints Bangladesh decided to enter into a loan agreement with its parent company to facilitate the opening of L/Cs for the import of materials and help the company meet working capital requirements

The shareholders' loan amounting to US$60 million can only be drawn down in phases as per the company's business requirements.

Forex support

"The move comes as a part of our commitment to lend a hand to the country's foreign currency reserves," director and chief financial officer at Berger Paints Bangladesh, Sazzad Rahim Chowdhury, told the Business Standard.

In common with other firms in Bangladesh, the company is facing the challenge of rising prices of imported materials against a devaluation of the local currency versus the US dollar.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.