Feb 22 2019

USD200m pharmaceuticals company – Trade Finance Service

Case:

A USD200m pharmaceuticals company which is a part of a USD 800m group. Set up in the ‘80s, it is one of the leading players in the world in the production of certain generic pharmaceutical ingredients. Despite being a net exporter (the company is a Star Export House) – to drive the growth in business volumes, company saw a sharp rise in its import volumes. To finance the working capital cycle, company looked to financing the imports side of business as it was reasonably insulated against the exchange rate movements.

Myforexeye Value Addition:

The client approached Myforexeye to assist with import financing. Given the natural hedge the client enjoyed, the import financing in USD became all the more attractive to the client. However, given the disparity of suppliers and non-usage of Letters of credit in imports from their regular partners, Supplier’s Credit was ruled out very early in discussions with the client’s suppliers and purchase teams. Myforexeye advised the client to explore the Buyer’s Credit route and informed that the client will need to get Standby Letter of Credit (SBLC) added to their existing non-fund limits as a sub-product. Guiding the client through the process, we sought the assistance of their bankers on the robust process to grant the overseas lender enough comfort. The client was successful in getting SBLC added to their existing Non-fund based credit limits from their bank. The client shared their transaction of more than USD 500k for syndication with us for a specified value date of funding. Myforexeye team reached out to its network of banks across the globe and successfully tabled very competitive quotes from an offshore bank. It took only 2 days to complete the whole process (both the one-time documentation and the transactional documentation). Funding happened on the value date and the funds were remitted to the NOSTRO A/c of the issuing bank for onwards payment to the supplier.

Client was very satisfied with our service as Myforexeye guided them throughout the process; assisting with the documentation as well as keeping a close tab on the date of the transaction right till its completion. We were able to introduce the client to a relatively new product and assist in extending the import cycle to free up working capital.