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Working Capital Guarantee secures large contract to Odense Maritime Technology

The Danish maritime consultancy was given an extraordinary opportunity to bid for a contract with the Canadian navy. But the demand for a large performance guarantee almost cost OMT the contract. A Working Capital Guarantee from EKF was the answer.
What
Complete design of new offshore patrol ships for the Canadian navy
EKF's role
EKF provides a working capital guarantee to cover 80% of a performance guarantee
EKF product
Working Capital Guarantee
When
7 years
  • Quote

    We would not have won that contract and experienced our current development without the participation of EKF

    Knud Sant, Chairman of the Board, Odense Maritime Technology
    ​”Without the participation of EKF we would not have been able to bid for that contract, and we would not have won it either,” says Knud Sant, Chairman of the Board at OMT.

    OMT is a spin-off from the former Odense Steel Shipyard specialised in ship design. After much legwork OMT was given the opportunity to bid for the complete design of offshore patrol ships for the Canadian navy.

    ”We were allowed to participate in the bidding because the Danish navy showed the Canadians one of the newest frigates designed and built at Lindø. In the final round of bidding there were three qualified companies. We were clearly the underdog as we were the smallest company, and we were only two years old with a modest capital base,” says Knud Sant.
  • ​Nonetheless, OMT makes a bid for the project.

    However, the customer demands a performance guarantee from OMT which is insurmountable in proportion to OMT’s equity.

    ”We had to respond to their demand that we do not put our entire company on the line for one contract”, says Knud Sant, who adds that the Canadians gave OMT a week to consider their demand which was unconditional.

    OMT set up a meeting with EKF. And on the day of the Canadians’ visit to OMT, EKF offered OMT - in the form of a Letter of Interest - a working capital guarantee covering 80% of the performance guarantee.
    ”Our customer was highly impressed - they did not expect that. What we brought to the table was a guarantee from the Danish state which removed a major obstacle and allowed us to proceed with the contract negotiations,” says Knud Sant and adds:

    ”And later we managed to reduce the performance guarantee demand by 50%”.
    The working capital guarantee from EKF meant that OMT got security for their performance guarantee.
  • ​In this way OMT won the contract.

    ”We have proved that we can deliver, the contract for the next phase has been signed, and this contract has put OMT on the map as far as marine technology in Canada and the US is concerned,” says Knud Sant.

    At the same time, the contract has really accelerated the development of the company.

    ”This contract has lifted our company as contracts of this size require certification, IT, increasing capacity, contract and project management. We have brought the company forward simply because of this one contract,” says Knud Sant and finishes off by saying:
    "But we would not have won that contract and experienced our current development without the participation of EKF.
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