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Transportation Financing
Delivering value to top global metal trader by financing transportation of precious metals
Customer facts
Geography - Europe
Sector - Commodity Trading
Services - Purchase, transportation of Inventory through secure financing
Customer challenge
The European branch of a global metal trading company was facing a shortage of liquidity to support the booming growth of their precious metals trading division. The recent spike in the price of precious metals offered interesting opportunities of profit but the limited availability of cash was limiting their operations. Therefore, the customer was highly interested to launch a RePo financing program for the trading of precious goods in transit, ensuring a secured transaction by using a partner company specialized in secured logistics.
Opportunity Scope:
The customer wanted to partner for the creation of a long-term RePo financing program to optimize the funding of the transactions in scope.
EVDO solution
Efficient management of the working capital process related to the sales & purchase at the moment of shipment of the goods (under the responsibility of the logistic operator) until the goods are sold back to the customer at destination. Improved net cash position of the customer as goods are sold at origin with immediate payment to the seller. This, combined with extended payment terms by repurchase at destination, materially improved the liquidity position of the client. The financing of the solution is economically attractive as the goods are used as collateral, with the associated risks covered by the logistic operator. Marketing advantage in terms of retaining control over its supplier, improving payment terms to them & capacity to pursue larger volumes of trade.
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