ASEAN Insight Seminar Yorkshire and the Humber Export Finance - - PowerPoint PPT Presentation

ASEAN Insight Seminar Yorkshire and the Humber

Export Finance – Support for UK Exporters

Innovation Centre, York Science Park- April 27th 2016

Paul Wright

Export Finance Adviser – Yorkshire and the Humber

Who are we....

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Our products and services in simple terms....

• UKEF’s support broadly falls into two categories

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Products and services that support the

• verseas

buyer that then support the exporter

• Providing guarantees to banks on the loans they give to overseas

buyers to purchase goods and services from UK suppliers

• Direct lending to the overseas buyer so that they have the funds to

purchase goods and services from UK suppliers Products and services that support the exporter

• Reducing or removing the risk of non – payment from the
• verseas buyer
• Helping to support a bond offering which is a requirement of the

contract

• Assisting with working capital requirements

Eligibility and Conditions of Support

• Our role is to support UK exports, so we require a contract with an entity

carrying on business in the UK

• Shareholder nationality is not important, but must be a registered business in

the UK

• Flexible in terms of UK Content
• Min. of 20% UK content (“UK content” = contract value less non-UK costs)
• Up to 80% from third party countries

Can I offer credit but reduce risk of non payment from customer?

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Credit insurance provides a business with protection against the failure of a customer to pay them for the products/services they have delivered

Export Insurance Policy

UKEF Export Insurance Policy….

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Single Risk Cover

Designed to cover specific buyers/contracts, 1-2% premium, up to 95% indemnity

Increased confidence to trade

Risk horizon of 24 months allowing pre and post shipment risk to be covered

Support growth with new partners in new markets

… and may support financing if needed

More difficult markets

For non Europe/Advanced OECD countries where private market cover declined

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Export Insurance Policy – Health/Greece

“We wouldn’t have been able to continue trading under such restrictive

• terms. UKEF stepped into

the breach with an alternative to the private sector insurance that had suddenly become unavailable.” Paul Whatley, Finance Director, GR Lane

How can I pay my suppliers before being paid from my customer?

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Payment received Stock Purchased Wages paid Product or service created Customer invoiced

Export Working Capital Scheme

• Specialist supplier of heating, ventilating, air conditioning (HVAC) and

refrigeration equipment and systems. Case Study

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UKEF Export Working Capital Scheme:

• Any country / max 75% contract value
• Bank guarantee (up to 80%)
• Access to bank funding / bank terms
• Allows flexibility in payment terms

How can I issue bonds and guarantees without restricting cash flow?

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Performance Bonds Warranty / Retention Bonds Advance Payment Bonds / Guarantees

But…….

• Utilise bank facilities
• Cash cover
• Makes export less attractive

Bond Support Scheme

Case Study

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• Specialist supplier to Mining

and other sectors

UKEF Bond Support Scheme:

• Bank guarantee (up to 80%)
• UKEF security can replace cash cover / Increase facilities
• Guarantees may be required to secure contract / deposits

Can I Offer Finance to my Buyers?

• We can support loans for up to 85% of the contract value (potentially a

repayment guarantee of 100%)

• We can also lend directly to overseas buyers
• Loans are typically repaid over a 2-10 year period plus any

construction/delivery period

• Support is available in a range of major currencies, including GBP, USD, Euro

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Case Study: Nghi Son Refinery Project

• UKEF was among several ECAs which worked together to support the US

$9.4bn financing for the Nghi Son Refinery Project with a US$250m loan.

• As Vietnam’s largest civil construction project to date, it will process 10 million

tons of crude oil a year when completed in 2017.

• UKEF supported a range of supplies from UK firms, including the EPC contract,

project management services and other supplies in relation to the refining and petrochemical process.

• The site is located 200km

south of Hanoi in the Tinh Gia District of the Thanh Hoa Province.

Questions

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We aim to ensure that no viable UK export fails for want of finance or insurance Paul.wright@ukef.gsi.gov.uk Export Finance Adviser, Yorkshire and the Humber

• Tel. (07812) 667312

www.ukexportfinance.gov.uk

Contact Details