Wal-Mart ready to loan $50 million to Bangladesh factories
By Jessica Wohl
(Reuters) - Wal-Mart Stores Inc (WMT.N: Quote) told investors on Thursday that it could provide up to $50 million in low-interest loans or other types of payments to Bangladesh factory owners for building improvements.
The money is part of the more than $100 million in loans and access to capital that a group of North American companies including Wal-Mart and Gap Inc (GPS.N: Quote) pledged in July. The Bangladesh central bank would need to approve any foreign currency loan. Details about lending rates also need to be finalized.
A massive push for improved factory conditions in Bangladesh comes after 1,129 workers were killed in the collapse of a garment plant in April and another 112 people perished in a factory fire there in November.
In July, North American companies including Wal-Mart created the Alliance for Bangladesh Worker Safety, which is separate from a European-led group including a larger number of retailers and union groups known as the Accord on Fire and Building Safety in Bangladesh. The North American plan was criticized by groups that think the European-led plan including binding arbitration is stronger.
Wal-Mart is speaking with the central bank of Bangladesh as it tries to figure out the best way to fund factory safety improvements, whether through loans, earlier payments for shipments or other methods, global Chief Compliance Officer Jay Jorgensen told analysts and investors on a call on Thursday.
The call, run by Wal-Mart's investor relations staff, was not made publicly available. Wal-Mart confirmed details of the call that were presented to the company by Reuters. A transcript of the call is expected to be posted by Friday.
Wal-Mart has become more vocal about its activities in Bangladesh over the past several months, for example posting a list of banned factories online in May. Some investors have pressed the company for more details, and a few of those on Thursday's call thanked it for its more transparent approach.
"It's still somewhat unclear what is the right way to best take care of the workers in Bangladesh," said Citi Managing Director Deborah Weinswig, who rates Wal-Mart a "buy." Continued...