Viktor Yankovsky, Business Development Director, STENN - Paradigm change in the global trade
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International Factoring as the engine for Russian exporters
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Viktor Yankovsky, Business Development Director, STENN - Paradigm change in the global trade
- 1. Paradigm change in the global trade International Factoring as the engine for Russian exporters Stenn©2017 Moscow Economy Conference Bangkok 2017
- 2. Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017 What is international trade? …the exchange of capital, goods, and services across international borders or territories. It is the exchange of goods and services among nations of the world.
- 3. How do we manage trade finance while expanding? Major issues: 1. Risks We are not going to be paid at all We are not going to be paid fully Payment can be delayed Trade disputes 2. Cashflow Capability to produce goods to meet purchase orders Payroll Payments to raw material suppliers Capacity for growth Renovation of manufacturing capacity Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 4. How do we manage trade finance while expanding? Instruments: • Banks Long bureaucratic process Due Diligence and Compliance Document flow Assets as Collaterals Limited credit lines Limited footprint • Trade Credit Insurance • Private investors Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 5. How do we manage trade finance while expanding? Instruments: • Banks • Trade Credit Insurance (TCI) What do I know about my buyer How can I request details on them What if I am not being paid, or payment delayed Premiums Credit limits • Private investors Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 6. Paradigm change in the global trade. International factoring as the engine of that Stenn©2017 How do we manage trade finance while expanding? Instruments: • Banks • Insurance • Private investors or even worse, loan sharks Much higher interest rate Lack of security (unlike corporate lenders) Limited credit line Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 7. How do we manage trade finance while expanding? Instruments: • Banks Insurance • Loan sharks …anything else? International Trade Finance Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 8. Trade Finance – types What is it at all? …is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 9. Main benefits of ITF • Underwriting of importers – no risk for sellers • Assignment of Account Receivables – no collateral for sellers • Own scoring system – no dependence on credit line • Flexibility “Credit card” for business – you choose when to use, and when not to use Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 10. How we position it in Stenn International… Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 11. Our Story 6continents: We finance buyers around the world 2offices: Singapore, London $12bln financed: STENN teams track record since 2006 To offer a solution around a simple but very powerful idea: give buyers and sellers an easy and low-cost way to achieve open trade terms and at the same time give sellers immediate access to working capital. Stenn offers both buyer and seller a win win solution: Ø We give the buyer the ability to sell it before they pay for it with improved shareholder value as a result. Ø We give the supplier access to low cost of capital credit allowing them to properly finance their production and their growth from more attractive buyer payment terms.
- 12. All figures and values are for indication purposes only and are not to be treated as an offer. 1. Seller sells $100 of goods to buyer. 2. Stenn pays seller $98 at shipment. 3. Buyer pays Stenn for the goods after the agreed delay of payment. How Does It Work…
- 13. Our Products 1) AR (Accounts Receivable) Finance. Confirmed, disclosed, non-recourse, 100% advance (or less if dilution is possible), approved credit rating and jurisdiction of the buyer or insured/LC-backed 2) Confidential AR Finance. The same, but communications with the buyer are made on the supplier’s behalf and the payments are collected into a lock box/escrow account. 3) Pre-shipment Finance. Payment with an LC before the shipment is made, turns into AR Finance after the shipment is made. 4) P/O (Purchase Order) Finance. Advancing funds to the client to purchase the goods, collecting from the end buyer. Goods need to be presold (non-cancelable purchase order), goods delivered to the buyer or to a warehouse in a third-party facility. 5) Back-to-back L/C (Letter of Credit). Mirroring inbound and outbound LC Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 14. Greg Karpovsky, Executive Chairman ‣Total assets of $1.96 bln, net profit of $95 mln. on revenues of $210 mln. in H1, 2008 ‣Rated by Fitch and Moody’s ‣Counted blue chip names including Temasek and GSAM on its list of investors Expertise and Experience Greg Karpovsky, the head of Stenn team, is a leading trade finance executive, with a long and extensive history as a pioneer in trade finance. Greg was the founder and CEO of Eurokommerz which became the largest privately owned factoring company in the world by 2008 Ø “We aspire to our services becoming the financial tool of choice for both SME exporters from Asia and the bridge to trade for importers and retailers in the west.”
- 15. Victor led business development operations for multinational projects in Western Europe before moving to Singapore in 2009. Victor is a key member of the American Chamber of Commerce and is a regular guest speaker at numerous Asian business conferences. Victor Yankovsky Director, Global Business Development Head of Asia “The markets of Greater China, South-East Asia and South Asia are some of the most dynamic worldwide. It’s crucial to understand cultural sensitivities and local business nuances when dealing with Asian business owners. Stenn’s contacts and dealings in Asia are all geared to winning trust and putting our Asian clients at ease.” Asian Understanding
- 16. Seller's Benefits with Stenn Business growth Ø Increased appeal to existing buyers by offering better payment terms Ø Easier to get new buyers through competitive payment terms Reduced risk Ø The risk for the buyer not paying, or paying late is taken on by Stenn Improve cash flow and working capital Ø Access to working capital for materials Ø Access to capital to fund growth and investments
- 17. Apparel and accessories Footwear Toys and childcare Sporting goods Cutlery Utensils and glassware Electronics and accessories Auto parts and accessories Buyer's Benefits with Stenn Reduce financial costs Ø Reduce letters of credit (L/C) usage Ø Move credit cost to seller Improve cash flow and working capital Ø Free credit lines tied up in L/Cs Ø Increase days payable at sellers cost Ø Increase return on cash Ø Working capital improvements Strengthened seller / improved performance Ø Access to working capital for materials Ø Access to capital to fund growth and investments
- 18. Associations & Partners ‣ Dun and Bradstreet ‣ Mashreq Bank ‣ Global Market Development Centre ‣ North American Retail Hardware Association ‣ Cargo Services ‣ Citibank ‣ Deloitte ‣ Tinubu Square
- 19. Major export markets • USA / North America • Europe • South-East Asia and South Asia Our clients • Manufacturers • OEM/ODM • Sourcing offices • Commodities Average mandate • $300k-3M invoice • 60-90 days payment terms Our expertise Paradigm change in the global trade. International Factoring as the engine for Russian exporters Stenn©2017
- 20. Contact Information www.stenn.com English http://www.stenn.com/zh/main/ Chinese Stenn International Ltd. Registered at United Kingdom v101, 1-45 Durham Street, London, SE11 5JH Registered in England #09488169. A part of the Stenn Group. Global Operations United Kingdom office v101, 1-45 Durham Street, London, SE11 5JH Landline .: +44 20 3735 9080 Asia Operations Victor Yankovsky victor.yankovsky@stenn.com Level 5,7&8, Two Exchange Square, 8 Connaught Place, Hong Kong Mobile (852) 5218 2014; Whatsapp (65) 97315730; WeChat: victoryankovsky Landline (852) 2297 2368 PRC office – Maxy Lam maxy.lam@stenn.com Level 9, CTF Finance Centre, 6 Zhujiang Dong Road, Tianhe District, Guangzhou 510620, P.R. China广州市天河区珠江东路6号周大福金融中心9楼 USA office – Phil Parker phil.parker@stenn.com 601 S. Figueroa, Ste 4050, Los Angeles, CA 90017 Office 213 330 2611 Mobile 424 298 1076 WhatsApp: 424 298 1076 India office – Shruti Singh shruti.singh@stenn.com Mobile (91) 99 20853309 ; WeChat: shrutimssingh24 7th Floor, The Capital, BKC , Bandra E, Mumbai 400051 Landline (91) 22 4905 5600 Kingdom of Thailand office – coming in 2018