An export working capital guarantee and bonding line from EFIC helped Lean Field Developments
When Lean Field Developments Pty Ltd (Lean Field) won their first major Australian pipe laying contract with QGC Pty Limited (QGC), a subsidiary of Britain’s BG Energy Holdings Limited, for the installation of gas and water pipelines in Queensland’s Surat Basin, they saw this as the first of many opportunities to further establishing their track record and reputation within the international oil and gas industry.
The Brisbane-based start-up, specialising in servicing the rapidly developing coal seam gas industry in Queensland, is part of the supply chain to the massive Queensland Curtis LNG project.
Like other suppliers, Lean Field was required to provide performance bonds to QGC in support of its contractual obligations under the pipe laying contract. The company also needed additional liquidity for existing and proposed contracts. However, as a company without a long trading history in Australia, it was unable to obtain traditional bank finance for performance bonds.
EFIC has provided a bonding line for Lean Field to draw on as required, enabling it to meet performance and warranty bond obligations under contracts it enters into. EFIC also provided an export working capital guarantee facility to support a standby loan facility from the Company’s bankers.
“With the support of EFIC’s export working capital guarantee and bonding line, we are now able to deliver on these contracts and demonstrate our company’s ability to meet the market’s demand for our services,” said Lean Field CEO, Cory Stevens.
“While many SMEs are fully capable of delivering on major national or international supply contracts, the need to provide performance guarantees can be a financial barrier to their success,” EFIC’s Director, SME and Mid-Market Robert Dravers explains.
To obtain performance guarantees from a bank, SMEs are often required to provide full cash collateral but this may unduly restrict their available working capital. “Bonding lines and working capital guarantees from EFIC are another way we partner with the commercial finance market to get behind Australian suppliers to onshore and offshore resources projects” concluded Mr Dravers.
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