IFC, ADM Capital launch Asia lending platform

The ADM Capital Somei Lending Platform is intended to provide medium-term debt financing to SMEs that lack access to bank financing. Of particular interest are situations where equity investments are considered unlikely, such as special situations or stressed scenarios, in which valuations tend to be discounted and shareholders do not want to be diluted.

IFC and another unnamed financial institution have each committed $50 million in seed capital to the platform, which has an overall target of $200 million. The platform will offer loans of $10-15 million, with maturities of 3-5 years, focusing on companies based in Cambodia, China, Indonesia, Mongolia, Myanmar, the Philippines, Thailand and Vietnam. Downside will be limited through over-collateralized positions, and lenders will be offered modest upsides through profit sharing.

"Banking systems are at capacity, and constrained by regulation in an environment that is witnessing an ongoing need for cross border and specialist financing, resulting in a collapse of funding options for small and mid-sized companies," said Christopher Botsford, joint chief investment officer of ADM Capital, in a statement. "IFC and ADM Capital will help such companies by making longer term loan financing available to help tide over their periods of stress."

The new platform follows a similar remit to the ADM Asia Secured Lending Facility, launched by ADM in 2012 with support from IFC and Arch Reinsurance. As with the earlier venture, ADM and IFC plan to help borrowers improve their environmental, social and governance (ESG) performance.

IFC's partnership with ADM follows the launch last month of its partnership with Apollo Global Management to invest in distressed assets in emerging markets. IFC and Apollo have contributed $500 million each to the partnership, which will focus on purchasing debt of households and SMEs with the goal of stabilizing vulnerable borrowers.

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• Topics
• Southeast Asia
• Greater China
• Credit/Special Situations
• Fundraising
• IFC
• ADM Capital