The bank grants the financing to the venture, which is then transferred to LR. The financing is backed by a guarantee from the local government, and the Israel Foreign Trade Risks Insurance Corporation (Ashra) is also insuring the loan. The credit insurance reduces the risk in financing the deal in a developing country like Papua New Guinea. Founded 31 years ago, the LR group manages hundreds of millions of dollars in investments.
The group operates agricultural ventures, mainly in developing countries, and provides advanced technology to improve their ability to expand their volume of business. The group operates below the media radar, but Lustig spoke briefly about his business last year at the Forbes Magazine conference. “The investments by various governments in agriculture are continually growing smaller. The World Bank is also cutting down its investments in this field. Only poorest and most unfortunate farmers are left to invest in the field, and the worldwide needs in agriculture relating to technology and investment are enormous,” Lustig said, noting that as of 2015, his company was managing ventures worth over $900 million (K2926.8m).
The current financing deal was led by Bank Leumi’s Corporate and Commercial Division, headed by Koby Haber. After several years of continual decline in the bank’s business credit portfolio (in line with the trend at most banks), the trend recently reversed. Bank Leumi’s business credit portfolio grew by NIS 2.5 billion to NIS 44 billion in the second quarter of this year. The bank has a special unit for financing deals by Israeli exports with buyers in various countries. Post Courier/PNGfacts