UKEF helps OGN secure multi-million pound contract
Support from UK Export Finance has helped North East-based Offshore Group Newcastle (OGN) secure a multi-million pound contract.
Support from UK Export Finance (UKEF), the UK’s export credit agency, has helped North East-based Offshore Group Newcastle (OGN) secure a multi-million pound contract earlier in 2014 from Kvaerner for the Shell-operated Nyhamna onshore Gas Plant project in Norway.
UKEF provides financial support for UK exporters by providing a range of specialist insurance and bonds that enable exporters to operate in markets where the commercial sector is unable to provide support. UKEF’s local Export Finance Adviser, Jonathan Leonard, comments:
When signing an export contract with an overseas buyer, it is common for exporters to ask for an advance payment to cover some of the initial costs. In return, the buyer may ask the exporter’s bank for a performance bond – or guarantee of delivery – in case the exporter fails to meet their contractual obligations. The difficulty for exporters is that their bank may want them to set aside cash in case the bank has to honour that bond, and in many cases businesses need that cash as working capital.
However, using its Bond Support Scheme, UKEF can provide a guarantee to the exporter’s bank, which limits the bank’s exposure.
Richard Glasspool, Director for OGN says:
Needing a performance bond to support an overseas contract can be a constraint on a business, but UKEF worked with us and our local bank, HSBC, to find a solution. Using the Bond Support Scheme enabled us to bid for a prestigious international contract, as well as retaining our working capital. This has allowed OGN the freedom to look at other overseas opportunities for 2015 and beyond.
Jonathan Leonard is contactable on +44 (0)7818 570615 or jonathan.leonard@ukef.gsi.gov.uk.
Notes for Editors
- UK Export Finance is the UK’s export credit agency. It supports long term economic growth and competitiveness by complementing the private market with insurance for exporters, loan guarantees to banks, and support for and provision of loans to overseas buyers of UK goods and services.
- Sectors in which UKEF has supported exports include: aerospace, petrochemicals, construction, oil and gas, mining and metals, telecommunications, and transport.
- UKEF has a regional network of Export Finance Advisers supporting export businesses.
- UKEF supports exporters with a range of products that include: * Bond insurance policy * Bond support scheme * Buyer and supplier credit financing facility * Direct lending facility * Export insurance policy * Export refinancing facility * Export working capital scheme * Letter of credit guarantee scheme
Media enquiries: Andy Aston, Head of News and Corporate Communications
Email Andy.Aston@ukexportfinance.gov.uk
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