- FTG says the new line of credit will provide funding for the group’s working capital, letters of credit and asset finance.
- The company is involved in a range of activities such as the manufacture of plastic water tanks, portable toilets, septic tanks, pipes, paints, fiberglass, cosmetics and synthetic hair.
Flame Tree Group (FTG) secured a Sh905million ($ 8.5million) line of credit from SBM bank to improve working capital and fund growth even as the company froze repayment of loans. loans maturing as a result of the coronavirus.
Managing Director Heril Bangera said in the latest annual report that the company has had to make critical decisions in a relatively short timeframe due to Covid-19 to ensure the viability of the 14 companies operating under FTG.
“We are proud of the agreement we signed with SBM and the confidence they place in our Group. “This has increased our financing capacity by 60%,” Mr. Bangera said.
The company says the new line of credit will provide funding for the group’s working capital, letters of credit and asset finance.
FTG is involved in a range of activities such as the manufacture of plastic water tanks, portable toilets, septic tanks, pipes, paints, fiberglass, cosmetics and synthetic hair.
Mr Bangera said the company had benefited from a moratorium on repayment of “multi-month” loans, initiated budget cuts and postponed projects due to occur by June due to the disruptive Covid-19 .
“In view of the pandemic, a moratorium of several months on all payments due from April has been received from the SBM and other banks,” the firm said.
Mr Bangera said it would help protect cash flow, the continued supply of raw materials and ensure survival even with low incomes in the months to come as Covid-19 hits businesses. FTG has suffered a mixed impact from the pandemic and prevention measures such as curfews, social distancing and school closures.
The company says it has seen an increase in sales of water tanks and hand sanitizers as the government calls for hand washing to reduce the risk of the virus spreading.
In addition, the drop in fuel prices triggered by the coronavirus has offered FTG a drop in the price of plastic raw materials on the international market.
But on the negative side, FTG says its operations in Rwanda have been badly affected by the drop in sales of products such as snacks, spices and playgrounds.