SATURDAY, March 02, 2024
nationthailand

Thai Union secures THB11.5 billion Sustainability-Linked Loan to underpin phase two of Blue Finance program

Thai Union secures THB11.5 billion Sustainability-Linked Loan to underpin phase two of Blue Finance program

Thai Union has worked with a core group of financial institutions with market leading ESG capabilities to update the sustainability-linked financing framework and ensure alignment with the Sustainability Linked Loan Principles. Their KPIs/SPTs are aligned to Thai Union’s sustainability ambitions under SeaChange® 2030.

BANGKOK – November 30, 2023 – Thai Union Group PCL (Thai Union), the world’s seafood leader, announced today the closure of a THB 11,485 million Sustainability-Linked financing package (Sustainability-Linked Loan or “SLL”). This new SLL marks the commencement of the second phase of Thai Union’s Blue Finance agenda, with a target of increasing sustainability-linked finance to 75 percent of their long-term financing by 2025. Between 2020-2022, Thai Union completed its first phase of Blue Finance – financing that has sustainability targets to benefit the oceans – by successfully increasing its long-term sustainability-linked financing to 50 percent.

The new SLL is denominated in both Thai baht (THB) and U.S. dollars (USD) across tenors of three and five years.  The successful closure of this dual tranche facility represents another strong step forward for Thai Union and its commitment to the Blue Finance agenda. The Company has demonstrated that its commitment to sustainability has enabled access to sustainable finance, which features a reduction in interest rates when committed targets are achieved.

A group of leading banks, HSBC, Bank of Ayudhya PCL, MUFG Bank, Ltd, Mizuho Bank, and Sumitomo Mitsui Banking Corporation have jointly underpinned the new financing, acting as Mandated Lead Arranger and Bookrunner (“MLAB”) and Sustainability Coordinators.

Thiraphong Chansiri, CEO of Thai Union said, "Thai Union is pleased to receive strong support from their leading relationship banks. At Thai Union, sustainability resides at the very core of our business. Since the introduction of SeaChange® in 2016, we've seamlessly woven this sustainability strategy into our entire global operations. SeaChange® played a pivotal role in instigating the launch of the first phase of our blue financing program three years ago. Now, with SeaChange® 2030, we've set more ambitious goals encompassing both people and the planet. Our 2030 objectives serve as key performance indicators for the new SLL, underscoring our steadfast commitment to sustainability. This unequivocally demonstrates how our dedication will fortify Thai Union's position as a leader in the capital market."

Thai Union secures THB11.5 billion Sustainability-Linked Loan to underpin phase two of Blue Finance program

In alignment to Thai Union’s sustainability ambition under SeaChange® 2030, Key Performance Indicators (KPIs) and Sustainable Performance Targets (SPTs) focus on the Company’s overall ESG performance, including maintaining consistent high rankings in the Dow Jones Sustainability Indices (DJSI) Food Products Industry Index. The sustainability-linked financing framework leverages the verified Science-Based Targets initiative (SBTi)’s ambitious Scope 1, 2 and 3 greenhouse gas emissions targets which align with Net Zero by 2050. In fact, Thai Union is the first global seafood company to set short-term and long-term goals verified by SBTi, accelerating meaningful progress in the industry. In addition, the framework includes the expansion of Thai Union’s success on sustainable fisheries to responsible aquaculture through certifications and Aquaculture Improvement Projects (AIP) to set the new standards and practices for the aquaculture industry globally. 

DNV was appointed the provider of Second Party Opinion Report on the KPIs and SPTs and confirmed the alignment to the Sustainability Linked Loan Principles. Each progress on KPI and SPT will be verified by external organizations to ensure a fair and independent evaluation. 

Giorgio Gamba, Chief Executive Officer, HSBC Thailand said, “This transaction reflects Thai Union’s commitment towards a sustainable seafood industry. Being the first global seafood company to set goals is a clear testament to Thai Union’s ambition as a sustainability leader. At HSBC, our depth of expertise in sustainable financing will help support our clients realize their sustainability aspirations.” 

Kenichi Yamato, President and Chief Executive Officer of Krungsri (Bank of Ayudhya PCL and its business units) said, “Krungsri is delighted to continue its support for Thai Union in the Sustainability-Linked Finance Phase 2. Our shared vision for ESG has united Krungsri and MUFG in our unwavering commitment to promoting sustainable practices across all dimensions and working together to help our customers achieve success on the path to a sustainable future by supporting ESG financing. These actions reaffirm our commitment to driving sustainability, supporting our customers on their ESG journeys, and working towards a brighter, more responsible future. Sustainability is not just a goal, but a fundamental foundation for success.”

Randy Loo, Managing Director and Head of Global Corporate Banking, Singapore, MUFG Bank said, “MUFG is honoured to partner Thai Union in its ongoing commitment towards empowering a more sustainable world for future generations. The bank’s leading roles in this blue financing demonstrate an alignment of sustainability goals with Thai Union as well as MUFG’s ability to leverage the full extent of its Asia Pacific franchise, including our strategic ties with Krungsri, to maximise success for key clients. We would like to congratulate Thai Union once again for this successful transaction.”

Kei Shirota, Country Head of Thailand, General Manager of Mizuho Bank, Ltd. Bangkok Branch said, “Mizuho would like to express our sincere congratulation to Thai Union once again on this successful Sustainability-Linked Financing and is proud to be part of Thai Union’s second-phase Blue Finance program. The excellent collaboration with the other leading banks in providing this Sustainability-Linked Financing to Thai Union demonstrates the commitment towards sustainability financing by Thai Union’s like-minded partners as well.  We are very pleased to learn that Thai Union is committing itself to very ambitious sustainability goals which require beyond business-as-usual efforts and resources to monitor the entire supply chain and is an exemplary role model for other companies in Thailand and industry peers globally. Mizuho believes that this Sustainability-Linked Financing will contribute to Thai Union’s achievements towards their sustainability journey and business.”

Takashi Toyoda, Country Head of Thailand and General Manager of Bangkok Branch, Sumitomo Mitsui Banking Corporation, Bangkok Branch said, "SMBC is honored to extend its support to Thai Union as it continues to exemplify remarkable leadership in sustainability initiatives, contributing significantly to advancing the broader environmental and social agenda.

Thai Union's adoption of rigorous and pioneering Key Performance Indicators (KPIs) sets a commendable standard for the entire industry and it signifies the harmonious alignment of Thai Union's moral commitment to Environmental, Social, and Governance (ESG) principles and SMBC's capability to provide innovative financial solutions tailored to the specific needs of sustainability-driven enterprises. 

SMBC anticipates ongoing collaboration to further cultivate sustainable financial practices and endorse Thai Union's initiatives that positively contribute to the global ESG landscape.”

Thomas Leonard, Head of Section, Sustainability Services, Supply Chain & Product Assurance of DNV (Thailand) Co., Ltd. said, “We are very pleased to be supporting Thai Union on the Sustainability-Linked Financing Instruments Second Party Opinion.  

DNV concludes that the SPTs: (1) to be ranked in the top 5percent companies for the DJSI Food Products Industry Index as per S&P Yearbook; (2) Reduction of absolute GHG Emission under Scope 1 and 2 by 42 percent by 2030 from 2021 Baseline; (3) Reduction of absolute GHG Emission under Scope 3 by 42 percent by 2030 from 2021 Baseline; and (4) 100 percent of shrimp purchasing volume (kg) is responsibly sourced through a certification that has been benchmarked by GSSI and is stated as GSSI Recognized or a credible AIP by 2030, are meaningful and relevant in the context of TU’s broader sustainability and business strategy and represent a material improvement over a predefined timeline. DNV concludes that TU’s targets are ambitious and deemed to go beyond what is considered ‘business-as-usual’. DNV has also reviewed the credibility of TU’s approach to achieve the SPTs and considers them to be achievable within the timing set.”

On the basis of the information provided by TU and the work undertaken, it is DNV’s opinion that the Sustainability-Linked Financing Framework proposed meets the criteria established in the Protocol and is aligned with the Principles. The SPTs are material and relevant to TU’s business strategy, operational environment and are considered to be ambitious and meaningful in the context of their operational environment.”

More information on Thai Union’s industry-leading global sustainability strategy, SeaChange® can be found here
 

nationthailand