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July 22, 2020

Ford gets GBP500m loan guarantee from UK gov

The UK government has announced that Ford has received a GBP625m loan facility from commercial banks with support from a GBP500m guarantee from the UK Export Finance (UKEF) department.

By Sam Duke

The UK government has announced that Ford has received a GBP625m loan facility from commercial banks with support from a GBP500m guarantee from the UK Export Finance (UKEF) department.

UKEF will provide the guarantee under its Export Development Guarantee (EDG), a new facility launched that will support high value commercial lending to UK exporters.

Ford’s loan facility will support its Dagenham engine export operations and product development activity at its Dunton site.

Previously, UKEF’s support had to be tied to an individual export contract, but the UKEF is now able to support a company’s general export activities using the EDG, unlocking financial support for companies that wish to:

  • secure working capital to bid for multiple export contracts
  • scale up their existing export activities
  • invest in new premises and technologies linked to exports

The loan will increase Ford’s capacity to:

  • export from the UK
  • support investment into electrification, digital manufacturing and smart mobility solutions
  • upskill its UK workforce to safeguard thousands of highly skilled jobs at the Ford Britain Dunton Campus in Essex and engine production centre in Dagenham

Ford of Britain manufactures its engines for global export at Dagenham and the company designs its commercial vehicles, such as the Ford Transit cargo van – at Dunton. Ford is reinventing its product development and manufacturing processes in the UK to reduce vehicle emissions and make the UK campus its global innovation centre. To that end, Ford will be launching its first all-electric Transit Van in 2021.

International Trade Secretary, Liz Truss, said: “This deal firmly puts the UK at the heart of Ford’s plans to grow its export business, reduce emissions and support skilled manufacturing jobs. A thriving automotive industry is vital to the success of the UK economy. It brings prosperity and security to manufacturers across the country. That’s why we are putting its needs at the heart of our strategy to remove barriers to trade when negotiating free trade deals.”

Ford of Britain chairmam, Graham Hoare, said the financing  will help to maintain Ford’s position as a key UK exporter. Around 85% of engines and 100% of transmissions built in the UK by Ford are exported.

“I would like to thank UKEF for their confidence, and Citi who acted as coordinator and facility agent for the £625 million loan facility with a repayment term of 5 years,” Hoare said.

Mandated lead arrangers and lenders for the loan were Barclays Bank plc, Citibank N.A. London Branch, National Westminster Bank plc, Lloyds Bank plc and Sumitomo Mitsui Banking Corporation London Branch.

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