With CDB's representatives in attendance, a term sheet was exchanged between the two parties on Saturday, Tejarat reported on its website.
A term sheet is a nonbinding agreement setting forth the basic terms and conditions under which an investment will be made. A term sheet serves as a template to develop more detailed legal documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.
According to the agreement, Tejarat will receive a $300 million loan from CDB to in order to finance projects run by Telecommunication Company of Iran.
According to Financial Tribune, CDB is the world’s largest development finance institution, and the largest Chinese bank for foreign investment and financing cooperation, long-term lending and bond issuance. It ranked 87th on the Fortune Global 500 list in 2015. By the end of 2015, its assets grew to RMB 12.62 trillion ($1.83trillion), a balance of loans of RMB 9.21 trillion ($1.33 trillion), and a cumulative recovery rate of 98.78% that continued to lead the industry for the sixteenth consecutive year.
Established in 1979, Tejarat is the sixth largest commercial bank in Iran. The privatized lender has six international branches in Paris, London, Hamburg, Beijing, Dushanbe and Dubai. Tejarat bank from February 2016 until Sept. 20, 2016 succeeded in establishing ties with 65 active correspondents.
Tejarat bank had also signed an agreement with another Chinese bank-Export-Import Bank of China (Chexim) before. Under the agreement, the Chinese bank was supposed to finance two major petrochemical and telecom projects. The terms of the agreement, however, might have been extended to include schemes in auto and energy sectors, according to Tejarat Bank’s official website.
China is one of the largest importers of Iranian oil and a major investor in the country’s upstream sector. China also was one of the first countries that welcomed expanding of bilateral banking relations with Iran to cover industries in the post-sanctions era.