Case study

UKEF helps Optilan secure important pipeline business in India

Coventry-based supplier secures £1 million export contract to install a pipeline security network in India with UKEF support.

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Pipeline security
About the transaction: Optilan
Region Coventry, West Midlands
Sector Communications and Security
Export destination India
UKEF support Bond Support and Export Working Capital Schemes

In late 2016, Optilan was approached by Reliance in India to install a pipeline security network. The contract was worth £1 million, but stated that payment would only be made upon project completion.

This delay had the potential to cause difficulties for Optilan, who needed working capital to pay suppliers and staff prior to final delivery – an issue commonly faced by exporters.

To secure the deal, Optilan was also required to provide a performance bond from its bank, a guarantee it would deliver its side of the transaction. Banks usually require a cash deposit to offset the risk of issuing these bonds, but the cost of this would have restricted Optilan’s working capital even further.

Combined bond and working capital support

We provided a guarantee under our Export Working Capital Scheme, facilitating a £400,000 loan and giving Optilan the cash it needed to deliver. We also guaranteed 80% of the value of the performance bond under our Bond Support Scheme, significantly reducing the size of the deposit required.

Optilan took on the high-value contract and strengthened its reputation in India. UKEF has now supported Optilan to secure and fulfil multiple export contracts across Asia, Africa and the Middle East.

Tim Gray, Chief Financial Officer at Optilan, said:

Being able to access the combined bond and working capital support from UKEF meant that we could concentrate on delivering the project, without the financial issues we would have otherwise faced.

UKEF has been critical to our ability to win and keep taking on more major contracts abroad. For example, when we’re competing for a contract and get asked how we can afford to finance it, UKEF support means we can reassure our buyers, as well as allowing us to focus on delivering the contract. UKEF really is the perfect partner for UK exporters and we couldn’t be happier to work with it, time and time again.

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Published 6 October 2017