Export Financing from the EU and USA for Delivery of Agricultural Machinery in Ukraine

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Competitiveness increase in the market at the expense of reduction in cost price of the highest quality products and of improvement the labor conditions of their workers became the main priority of modern agricultural manufacture. Investment in the most productive and economical models of high-technology agricultural machinery, which had been produced by the lieders of the world agricultural machinery industry with the involvement of cheap and long money, became one of the main conditions for creating the stable agricultural business. Solving these problems becomes the main goal of pragmatic owner.

AGRO-BUILDING ALLIANCE ASTRA LTD is a multibrand company, which deliveries agricultural machinery produced in the EC and the USA to Ukrainian market. We together with eastern partners offer delivery financing programs by direct external economic contracts. Wherein the contract is concluded between the purchaser and the manufacturer of the agricultural machinery, and AGRO-BUILDING ALLIANCE ASTRA LTD being the official dealer of that producer in Ukraine responds for the bargain organization, delivery of spare parts, service support on warranty and post-warranty service. In the person of buyer, as a rule, is a non-resident of Ukraine Company, that belongs to business-group, or that is a parent company of the group.

The Financing Basis:

  • Western bank credit to the buyer for direct payment deliveries of equipment and of exporter services
  • Loan payments are made at the expense of the expert
  • Minimum advance payment is 15%
  • 85% of the export order can be financed
  • Credit period up to 7 years, credit repayment half-yearly by equal amounts, the first payment through 6 months after the delivery (starting point)
  • It is possible to finance expenses: payment for organization, credit management and reservation, percent and charges for insurance covering (is used by buyer, a rule)
  • Deliveries from third countries (can be partly financed)
  • Local expenses of exporter (also can be partly financed).

Export Financing at Insurance Covering of export agencies from the EC and the USA

Advantages:

  • Initiators owned means are used mainly for CMR an circulating assets financing
  • Financing transformation from project initiators means/credits in export financing that is made by state supporting
  • It is, as a rule, is more profitable than local financing
  • Absence of necessity in additional pledges and support.

Main Preconditions:

Main requirements for credit capacity inspection of enterprises/agricultural holdings:

  • Annual balances tested by IFRS or by US GAAP
  • Intermediate data
  • Commercial and bank information.

Estimation Criteria:

  • Ratings (Moodys, S&P etc.)
  • Listing of shares at interested exchanges
  • Capital investment of foreign enterprises/institutions
  • Positive credit story
  • Solvent deals in foreign currency/export proceeds.

According to the terms of insurance coverage customer has the right to use a part of credit for the purchase of agricultural machinery or other equipment that were manufactured in the third countries around program Financing of exports from the EU and the USA into Ukraine". This is possible if all ordered machinery and equipment are delivered by exporter from the country where insurance coverage and credit were obtained. Participation of general exporter who takes all deliveries from different countries in one contract and provides trouble-free rhythmic delivery of equipment from different producers to the buyer in Ukraine, is justified in a chart for the solution of these tasks.

Participation in the transaction of the general exporter (a company which specializes in professional services on the organization of export, import, customs clearance, storage, billing, execution and controlling of the agreement between a buyer and a forwarder) opens up possibilities for the buyer to use credit funds for the purchase of another important equipment for the manufacturing process of agribusinesses, that is produced in third countries. It allows ensuring deliveries rhythmicity and timely commissioning of purchased agricultural machinery and equipment.

This financing scheme of deliveries is widely practiced for last five years by leading agricultural holdings in Ukraine, which make financial reporting according to international standards and were the first who had reached IPO. Land-bank of the holdings has been increased in times during last years, and this is not limit. Independent means are invested by involvement of export financing programs, which are made by state supporting of exporting countries, for operating and rhythmic supporting by high-technology agricultural machinery and equipment of new agricultural enterprises that had formed a part of agricultural holdings. Approach like that opens possibility for agricultural manufacturers to modernized technical park with a minimum load on credit service, to achieve fall in products cost price and, as a result, to be competitive in Ukrainian market.

Company ABA ASTRA has a big experience in organization of such deals at the highest level. Consultation on programs of export financing from the EU and the USA, organization of negotiation process with participation of western banks and exporters, selection of necessary equipment and agricultural machinery, accompaniment of client at all bargains stages, and also further supporting by spare parts and service activities on warranty service do companys offers unique ones for the most hard-to-please representatives of agricultural business.

Please, address the stated below contacts to receive consultation about financing cost, insurance coverage, general exporter services and other deal details.

We take orders for bargain organization by above mentioned schemes for delivery of agricultural machinery and equipment from the EU and the USA in 2014 currently.


Manager for VIP Clients

ABA ASTRA LTD

Consultant of Internet Portal runo-agro.com

Vitalii Metelkin

v.metelkin@astra-group.com.ua

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