Cool six-figure contract for offshore equipment manufacturer

Hull-based offshore equipment manufacturer North Sea Ventilation has secured a six-figure contract to supply cooling equipment to Nigeria LNG.

NSV is a specialist manufacturer supplying heating, ventilating, air-conditioning and refrigeration systems for the energy sector.

Established in 1992 to supply the North Sea oil and gas industry, the company now sells to customers around the world and has a £9m turnover. With 80% of its sales overseas, key markets include the Middle East, far East, Europe, Russia, China, Australia and more recently Kazakhstan.

NSV secured a £0.5m order to supply cooling equipment to Nigeria LNG. Under the terms of the contract, the buyer agreed to provide a 50% advance payment to provide project funding in the preliminary phases of the manufacturing process.

However, in return, NSV had to provide an advance payment guarantee through its bank, HSBC. HSBC was not able to provide a bond of the size required within NSV’s existing credit arrangements, so the bank turned to UK Export Finance (UKEF) for a guarantee under its Bond Support Scheme.

In the past, this process would have involved NSV and HSBC submitting another application to UKEF, with UKEF undertaking parallel due diligence and approvals to those HSBC will already have undertaken. This would have added days or even weeks to the process, while UKEF, HSBC and of course NSV are keen to ensure NSV receives the finance it needs, when it needs it, to ensure the export contract happens.

As a result, in October 2017, UKEF launched a partnership with five high street banks to allow smaller exporters to access government-backed trade finance support directly from their bank. This means that, where previously it could take weeks in addition to the banks’ own turnaround times to access this support, it will now take a matter of seconds where the transaction is eligible.

So, in this case, HSBC was able to make use of the new bank partnership model. By completing an online application on NSV’s behalf, and, because the transaction met all of UKEF’s criteria, the guarantee was issued automatically and, most importantly, instantly without the need for any further due diligence or approval by UKEF.

NSV was then able to provide the required bond to its customer, ensuring it could access the £0.25 million advance payment and re-cement a previous relationship with a client.

John Parker, finance manager at NSV said: “Working with HSBC and UKEF has provided NSV the flexibility to realise export opportunities, securing larger contracts than we could otherwise be confident we could fulfil, and the new application process couldn’t have been simpler: less paperwork, quick turnaround and a positive decision.”