EFIC helped TTG Transportation Technology with an export working capital guarantee
TTG Transportation Technology Pty Limited (TTG) is an Australian train technology development company that provides products and consulting services to the rail industry. They specialise in energy optimisation software that focuses on fuel consumption efficiency and timetable achievement.
After winning a tender for train optimisation with UK’s First Rail Holdings Ltd (First Rail) against other global suppliers, TTG will install 119 of its Energymiser® systems in First Rail’s inter-urban trains. TTG has previously developed the train systems, and already proven the performance with Australian rail operations such as Pacific National as well as railway operators in India, China and Mauritania.
Under the contract, TTG is required not only to provide hardware design and installation, but also project management, support and maintenance. For TTG, the First Rail contract is significant as it is part of the largest rail operator in the UK, and North America. But in order to deliver on its contract, it needed to buy raw materials, and fund manufacture and installation costs.
After discussing their business plans and contract financing requirements with Ben Smith, Commercialisation Manager, Australian Technology Showcase at Trade and Investment NSW, TTG was introduced to EFIC.
EFIC provided a £379,000 export working capital guarantee to TTG’s bank, Westpac, enabling the bank to lend the funds to TTG to meet the required costs associated with the delivery on their contract.
“EFIC’s support for this project, through the provision of this guarantee to our bank, has enabled us to satisfy our contract requirements while focussing our attention and finances on our core business - delivering on this contract as well as developing further business opportunities”, said Dale Coleman, TTG’s Managing Director.
EFIC’s Director, SME and Mid-Market, Robert Dravers, explains that while many SMEs are fully capable of delivering on major international contracts, the offshore buyer’s demand for guarantees can be a barrier to their success.
“To obtain funds from a bank, an SME is usually required to provide full cash collateral to secure the loan. But doing so would mean diverting working capital from other opportunities, which puts an SME in the difficult position of having to choose between delivering on current contracts and continuing to grow its business”, said Mr Dravers.
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