Export Finance and Insurance Corporation (EFIC), the Australian Government’s export credit agency, has provided a bonding line and an export working capital guarantee to an Australian construction company involved in a major coal seam gas project.
The facility has been provided to Lean Field Developments Pty Ltd (Lean Field) to support existing and proposed supply contract works.
Lean Field, a Brisbane based start-up, specializes in servicing the rapidly developing coal seam gas industry in Queensland and is part of the supply chain to the Queensland Curtis LNG project.
Like other suppliers, Lean Field was required to provide performance bonds to QGC Pty Limited, the project principal, in support of its contractual obligations under the pipe laying contract. The company also needed additional liquidity for existing and proposed contracts.
EFIC 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.
EFIC’s Director, SME and Mid-Market, Robert Dravers, said EFIC’s support is not limited to offshore contracts.
“The resources boom in Australia is creating a strong demand for services from EFIC from SMEs, whose access to bank finance or bonds (bank guarantees) is limited, Mr Dravers said. “EFIC can potentially assist such companies because they are integral suppliers to projects where the end product is exported.
“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.”
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 resources projects,” Mr Dravers said.
Export Finance and Insurance Corporation (EFIC)
Ph: 02 82735276