“In the Gaddafi era, our business with Brega would often go through various trading companies, which were typically based in London”, says Larsen. “We normally got our money, but the time it took would vary considerably. This was bad for our cash flow, and we also had to put a lot of time into chasing payments.”
With Gadafi out of the picture, Brega could instead offer to pay via a letter of credit. This is normally seen as one of the safest forms of payment in international business.
Lars Karlsmose, CFO at Kosan Crisplant, says: “We had been asking for payment in this form for some years, so this is a big step forwards for us. We now know for sure that the money will arrive, and also when it will arrive. This means that the risk to us has more or less disappeared.”