EFIC’s foreign exchange facility guarantee helped Drift International
When production company Drift International began producing the Australian drama production, “Drift”, they found that the international distribution agreement negotiated by the producers exposed them to foreign currency risk. The agreement was denominated in USD, and Drift International soon realised, sudden shifts in exchange rates could seriously affect their profit margins.
“Drift” tells the story of a family of outcast surfers emerging from a remote south west Australian coastal town to do the unthinkable – build a successful global business centred on their on-edge surf lifestyle.
The TV company that acquired the international distribution rights negotiated specific US dollar denominated advance payments that they were going to pay for those rights when the film is delivered in 2012. However, as the Australian dollar has continued its rise from the rate when the contract was signed, it has eroded the final payment due to the producers in 2012.
After being referred by a contact, currency services provider HiFX approached Drift International and provided the production company with a margin free facility to enable better management of the currency risk.
Backed by the foreign exchange facility guarantee from Australia’s Export Finance and Insurance Corporation (EFIC), HiFX were able to go further than they would have be able to without EFIC’s guarantee in fulfilling Drift International’s requirements, and extend the trading limit on their facility.
HiFX Managing Director, Spencer Wilcox, said the guarantee could be of significant benefit to the thousands of small to medium sized businesses in Australia which regularly deal in multiple currencies. “The foreign exchange facility guarantee from EFIC can help to give exporters increased certainty over their businesses profits,” Mr Wilcox said.
Andrea Govaert, Executive Director, SME and Mid Market at EFIC, said EFIC is excited to support the export of such a poignant and positive Australian story through our foreign exchange facility guarantee. “We are pleased to work with HiFX and to provide another way of supporting Australian businesses manage their export growth,” said Mrs Govaert.
HiFX is an award-winning specialist currency services provider with operations in the UK, Europe and Australasia.
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