Deutsche Bank and GE Aero Energy, a General Electric Company business that manufactures gas turbines and other power equipment, have announced their collaboration to introduce new risk management and working capital solutions for complex projects in Africa, China and other emerging countries. These transactions will be supported by a unique combination of traditional trade finance and the more progressive financial supply chain product offerings.
GE Aero Energy and Deutsche Bank work together to cover GE Aero Energy’s payment and documentary risk, enabling accelerated payments and hence improved working capital. The transaction involves the structuring of standby and documentary letters of credit, confirmations and transfers of such instruments. With Deutsche Bank’s guidance, GE Aero Energy prepares the shipping documents required for payment under the letters of credit. Where unavoidable discrepancies in the documentary presentation occur, Deutsche Bank then provides GE Aero Energy with an accounts receivable purchase linked to the underlying letter of credit.
Stephen Veigel, Commercial Finance & Risk Leader, at GE Aero Energy, said, “We are delighted to collaborate with the trade finance experts at Deutsche Bank to help us bring power and light to countries throughout the world. Through our relationship, we have been able to reduce payment risk as well as to accelerate the long-term cash flows associated with the substantial investment that is required for each GE Aero Energy project.”
Jon Richman, Head of Trade Finance and Financial Supply Chain Americas, Global Transaction Banking, Deutsche Bank, added, “Deutsche Bank is pleased to partner with GE Aero Energy on this innovative approach of combining traditional trade finance products with the latest financial supply chain solutions to support GE Aero Energy in their effort to provide energy services throughout the world. The Bank offers a complete range of next generation trade finance and financial supply chain solutions to allow our clients to optimize liquidity and risk management.”