A €30m paper manufacturer, which had undergone an insolvent restructuring two years earlier, was still finding it difficult to access credit from banks and suppliers. Its business model was sound, but growth was constrained by a lack of working capital. In 2010, TFS entered into an agreement to supply export finance facilities, releasing a high portion of the cash tied up in the debtors book. TFS also subsequently provided outsourcing support, opening up access to international wood pulp raw material suppliers, thus lowering input costs.
In 2009, a €20m recycled paper manufacturer had the opportunity of entering new markets with orders in hand from customers in Hungary and Greece. At a time of global recession and sovereign debt crisis, the incumbent banks withdrew their support from these markets. TFS took a different approach and formed positive views on the individual debtors in these areas, advancing a substantial amount on the invoices raised.
In 2008, TFS received a mandate from a €40m oleochemical manufacturing concern to source specific raw materials by approaching suppliers on their behalf. Our customer was keen to increase the allocation of these scarce raw materials and wished to pay within 90 days as opposed to cash in advance (as is customary in the industry). TFS successfully completed the mandate and still finances the purchase of these raw materials on behalf of the client.
A small chemical processing company with a need to source raw materials from overseas asked TFS to assist it in contacting new suppliers from abroad. The modest size of the business made it hard for the client to become an accredited buyer in the eyes of large overseas suppliers. TFS used its connections to contact new suppliers and negotiated new contracts on behalf of the client. Furthermore, as principal in these transactions, TFS was able to extend payment terms and thus increase financing headroom for the client.
TFS proactively identified an opportunity to supply raw materials for biofuels, sourced in the UK and Ireland, to southern European markets where prices were much higher, offering an opportunity for arbitrage. However, the TFS business model does not contemplate commercial risks, even when margins seem very attractive. Therefore, TFS informed a biodiesel manufacturer based in Italy of this opportunity. Under the agreement, TFS became a principal in the transaction, financing the purchases under 60-day terms, in a six-month multi-million spot supply contract.