Deutsche Post DHL backs growth ambition with $2.6bn credit line

Deutsche Post DHL has secured a $2.6bn line of credit with a consortium of international banks as it seeks to improve its financial position. The company said the 2bn euro revolving credit facility replaced previous bilateral credit lines with a less complex arrangement.

The five-year syndicated loan was agreed with a syndicate of commercial banks including Citibank, Commerzbank, Deutsche Bank and HSBC.

Deutsche Post said the credit line took advantage of current “favourable” market conditions to provide the company with long-term financial security as it looks ahead to future growth.

Chief Financial Officer of Deutsche Post DHL, said: “By concluding this syndicated credit line we have, as planned, further reduced the complexity of our financing instruments and secured long-term advantageous financing conditions.”

The new financing arrangement came as part of Deutsche Post DHL’s new financial strategy, which was issued in March 2010.

The strategy aims to make the company more attractive to investors and secure long-term financial sustainability by propping up the company’s BBB+ credit rating in the long term, and delivering 40% to 60% of the company’s consolidated net profit to shareholders.

Deutsche Post DHL said last month it was aiming at a growth rate of between 13% and 15% over the next five years, assuming that the global economy does not experience another major economic downturn.

The company, which estimates its current operating profit at around $1.7 billion (1.3 billion euro), said it was expecting its growth primarily to come from its DHL divisions including its Express, Global Forwarding, Freight and Supply Chain divisions.

Mr Rosen said today: “Thanks to our extremely stable financial foundation we have the flexibility and stability required to be able to actively shape the company’s future, even if framework conditions should change. Today’s agreement contributes significantly to that.”