Export Finance and Insurance Corporation (EFIC) has extended a working capital guarantee to Ferra Engineering Pty Ltd (Ferra) to help the company deliver on a sub-contract to supply parts to the F-35 joint strike fighter (JSF) project.
EFIC is the Australian Government’s export credit agency, helping Australian exporters grow their business in overseas markets.
EFIC is supporting the Brisbane-based Ferra with an A$2.7 million export working capital guarantee provided to the company’s bank, Westpac, enabling the bank to lend this amount to Ferra to assist in financing the sub-contract.
Ferra is a specialist manufacturer of aerospace structures and sub-systems, and has secured its third contract to supply weapons bay adapters for the JSF being developed by Lockheed Martin Corporation (Lockheed).
Ferra is a supplier to one of Lockheed’s key sub-contractors. As part of the sub-contract, Ferra will manufacture, assemble and test weapons adapters, the mechanisms to hold and release the munitions carried by the JSF.
Ferra is the only company worldwide approved by Lockheed to make and assemble weapons bay adapters for the JSF program.
Ferra faced a working capital shortage to execute the job since the sub-contract specified that they would be paid only after the parts were shipped.
With support from EFIC, Westpac was willing to provide a loan for working capital to Ferra. EFIC’s export working capital guarantee gives the bank a guarantee for repayment of the loan.
Having completed similar sub-contracts for the JSF project, Mark Scherrer, Ferra’s Managing Director is confident of their technical ability to deliver on the current order.
He adds that maintaining cash flow throughout the sub-contract can be a challenge with large orders and the assistance of EFIC and Westpac has been invaluable in this regard.
EFIC’s Executive Director, SME, Andrea Govaert comments that small and medium-sized exporters often find there’s a mismatch between when they do work for an overseas buyer and when they get paid for it.
EFIC’s export working capital guarantees help bridge that gap and keep funds flowing.