Iran's SAIPA, Mellat Bank Sign Deal

Iran's second largest car producer, SAIPA Corp. and semi-private Mellat Bank signed agreements to increase credit lines, providing needed resources in the area of foreign exchange, opening letters of credit and providing bank guarantees for export, according to Akhbar Khodro, a local automotive website.

At a meeting, Hadi Akhlaghi Feiz Asar, the CEO of Mellat Bank, and Mehdi Jamali, the CEO of SAIPA, signed the new partnership deal which is likely to take effect from December 21.

Jamali said the auto manufacturing industry is a stimulator of the economy, which is why cooperation between the auto industry and the banking and finance sector must increase, the website reported.

A year-on-year comparison shows that production at SAIPA's manufacturing plants has grown by 53.2%; this has helped the economic growth of the country by almost 0.5%.

"This would not have come about without the support of the banking system," the SAIPA chief stressed.  

The growth of the auto industry will result in the growth of other related industries such as steel, textile, polymer and tires, Jamali added while noting that this will create jobs across the board.   

Due to Mellat's healthy capital and liquidity levels, he hoped the bank could assist with forex and give the company better credit facilities.

Manufacturers of car parts may also benefit from the Mellat-SAIPA deal that would help alleviate their financial conditions.

He added that with the help of the banking sector "we hope to remove obstacles that the small and large businesses are dealing with, and advance the development of the auto industry."

Akhlaghi, for his part, noted the performance of SAIPA and said the company's financial statements show the potentials of the auto group; therefore the banking sector is very eager to work with them.

"Mellat Bank sees it as a responsibility to help the auto industry and improve local production," he said.

"We are ready to help provide the needed resources for the long and short-term plans of SAIPA; we are ready to provide the required working capital."