A large multinational manufacturing company with an Australian division funded entirely through offshore debt facilities. Debt subordination requirements precluded local secured financiers which prevented the local division from securing an optimum debt structure.
The company required a local funding solution to overcome foreign currency risks and inefficiency due to withholding tax arrangements. Local Australian banks would not provide an unsecured, non-recourse facility due to company’s volatile credit rating.
Assetsecure facility delivered the following benefits:
- A funding solution which operated within the subordination restrictions.
- Local division repaid its loan to the parent company, releasing cash which had been tied up locally.
- Improved working capital enabled the local division to pursue further market opportunities and optimise tax.