Export Finance and Insurance Corporation (EFIC) , the Australian Government’s export credit agency is supporting Sydney-based Viocorp International Pty Ltd (Viocorp) with an export working capital guarantee to help the company deliver on its largest project and its first overseas win, a sub-contract in Malaysia.
EFIC has provided a five-month, A$1 million export working capital guarantee to Viocorp’s bank, ANZ enabling the bank to lend the same amount to Viocorp to assist in financing the sub-contract works.
Viocorp, a provider of digital media products and services for the internet has secured an A$5.4 million sub-contract with a global IT services company in Malaysia, which is providing a customised internet broadcasting project to a client.
Viocorp will provide works integral to the main contract including implementing a digital publishing platform and an integrated advertising solution, redesigning five client portals and implementing TV on-demand so that end users can buy and watch content through any internet connected device.
Most of the works are to be completed within the first eight months of the sub-contract and involve product development as well as substantial cash investment by Viocorp.
However, under the sub-contract, Viocorp will receive periodic payments from its customer.
The mismatch between when Viocorp incurred costs and received payments under the sub-contract meant that the company faced a working capital shortage and needed additional funding to perform the sub-contract.
ANZ was willing to provide working capital assistance to the company with EFIC’s support. EFIC’s export working capital guarantee gives the bank a guarantee for repayment of that loan.
“Without EFIC’s support to help us access additional working capital, it would have been extremely difficult for Viocorp to undertake this contract and continue expanding our business overseas,” said Viocorp’s Executive Chairman, Ron McCulloch.
“A shortage of working capital to fulfil a new export contract is a difficulty faced by many small and medium-sized Australian exporters”, said Andrea Govaert, EFIC’s Executive Director, SME.
“Viocorp is a fast-growing, innovative Australian business and EFIC is happy to support the company as it now moves into the international market.”
ANZ and EFIC have recently entered into a Master Working Capital Guarantee Facility agreement to assist SME customers with their export finance requirements. The agreement can support pre- and post-shipment finance across a wide range of industries.