29-07-2013

GE Capital and Gunvor launch €225M receivables financing program

Gunvor Group and GE Capital have launched a EUR 225 mil. factoring program for Gunvor’s receivables portfolio to finance part of Gunvor’s German refining business. The deal is a part of Gunvor’s broader strategy to diversify its financing base while reducing liquidity risk throughout its businesses.

“By freeing up trade finance lines we are creating more liquidity and more opportunity. So instead of just getting a bigger gas tank, factoring makes our financing engine more efficient,” said Gunvor’s Chief Financial Officer Jerome Schurink.

Gunvor is one of the first trading houses to establish a factoring program as a way to diversify how its supports its operations. This deal represents the largest single receivable finance program in Germany. Advantages to the approach include:
- Diversifies away from traditional financing sources
- Quicker than securitization programs, which bear some liquidity risks in uncertain times
- Cost of financing is based on the receivables rather than on the seller itself
- Financing can be arranged without any recourse and will not dilute existing lenders’ position

GE Capital has a longstanding presence in Europe, especially in Germany, where it is a leading developer and provider of factoring solutions This level of expertise was central to the formation of the relationship with Gunvor, whose German refining portfolio has annual sales of more than EUR 4 bil., requiring a strong partner.

“Gunvor’s growth over the years has been driven by the innovative approaches its financing team has taken to support the company’s trading and logistics expertise,” said Jörg Diewald, Chief Commercial Officer at GE Capital Germany. ”GE Capital looks forward to a successful cooperation with Gunvor which might even lead to other projects beyond financing—building on both companies’ footprint in the oil and gas industry.”

Gunvor’s German entities, which consist of more than 350 employees, consist of Gunvor Raffinerie Ingolstadt GmbH, and the refinery’s German marketing arm, Gunvor Deutschland GmbH. They serve the markets in Southern Germany und Upper Austria—providing an important fuel supply and competition to the land-locked area.