Vaculug becomes first retreader to raise sustainability linked financing

Vaculug has raised financing from Queens Road Capital in what the company describes as a world-first Sustainability Linked Financing Package (SLFP) for any retreading company. Vaculug will use these proceeds to fund its significant expansion and growth.

While interest rates remain high, Vaculug has is taking steps to reduce its overall cost of funding. Specifically, Vaculug has agreed to reach certain key performance indicators (KPIs) on metrics with regards to its environmental impact, social contribution, and governance metrics. Should Vaculug meet these criteria over the loan duration then Vaculug will receive a discount of 75 basis points (0.75 percentage points) on its overall cost of funding. Should Vaculug not be able to meet its commitments it will have to pay an additional 75 basis points over the cost of its funding.

Nimesh Purshottom, finance director of Vaculug commented: “Under its new leadership Vaculug has always been extremely laser focussed on making sure that it is constantly looking at ways to improve its environmental impact. In fact, it is a key component of our Corporate DNA. So, when I was looking at financing options, I thought why not put our money where our mouth is and financially commit to these targets! And whilst doing good for the environment and the community do some good for the company as well!”

Jason McQueen, Head of Lending Operations at Queens Road Capital commented: “When Vaculug approached us with this innovative structure we were intrigued! It was a win-win for us. If Vaculug reaches its metrics, then we benefit the environment. If it does not, then we benefit our bottom line. Either way, we win! We hope this is the first of many sustainability-linked financings that we do.”