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Cleantech guarantee saves important order

Export of machinery worth DKK 5 million would have been lost if EKF had not decided to assist C.F. Nielsen in a risky transaction with a newly started company in the USA.
What
Briquetting presses for a customer in South Carolina, USA.
How much
Three machines at the total value of EURO 0.7 million.
EKF's role
EKF issues a guarantee worth EURO 0.3 million to cover C.F. Nielsen´s supplier credit to the American buyer.
EKF product
EKF cleantech guarantee
When
2009-2012
  • Quote

    The transaction would not have been closed without EKF’s participation. The banks did not wish to take part in this transaction and we wouldn´t have dared to bear the entire risk all by ourselves

    Mogens Slot Knudsen, the director of C.F. Nielsen

    ​In the summer of 2009 C.F. Nielsen contacted EKF in order to obtain a guarantee to cover a new contract which the company had won in the USA regarding three briquetting presses. 

    Briquetting presses are used to produce briquettes made from residual products from the wood industry. The briquettes can be used in combined heat and power plants as a substitution for fossil fuel.  The buyer, Carolina-Pacific, wanted to buy on credit. 

    But it was a newly started company and briquetting is a new line of business in the USA, thus, it was a relatively risky transaction for which it was difficult to find bank financing. Furthermore, C. F. Nielsen was not ready to assume the risk alone. ​

  • EKF has a special focus on supporting Danish exports of cleantech solutions and EKF found the transaction most interesting as it involved a climate friendly product and a risk which was acceptable to EKF.

    In the risk assessment, EKF placed emphasis on the success of C.F. Nielsen in matching Carolina-Pacific with a Scandinavian energy company that would purchase the briquettes based on a three year contract.

    The contract puts Carolina-Pacific in a position to pay for C.F. Nielsen´s machinery. Furthermore, Carolina-Pacific had received a capital contribution from American investors and a venture company from Chile.   

  • ​The business transaction fell into place in autumn 2009.  C.F. Nielsen received a small part of the contract amount in down payment from the buyer while C.F. Nielsen and EKF shared the risk for the rest of the contract amount. 

    In addition, C. F. Nielsen is covered by a retention of title clause which makes sure that the machinery can be repurchased and resold if, contrary to expectations, the buyer would not be able to pay. 

    ”We are very pleased with the flexibility that  EKF has shown in finding a financing solution as well as with EKF´s commitment to a small project like this. Carolina-Pacific is also very satisfied as they have acquired their machinery and have managed to close a loan finance quickly”, says the director of C.F. Nielsen, Mogens Slot Knudsen. 







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