A look at the latest news in the finance sector.
Spooner Industries secures export credit finance
Industrial oven manufacturer Spooner Industries has secured a €2 million trade facility from Lloyds Banking Group, partly underwritten by government’s Export Credits Guarantee Department (ECGD).
The facility enables the company to fulfil a strategically important €5 million export order for the supply of drying equipment for the paper industry to the Philippines.
The solution, designed to mitigate international trade risk, consists of a ‘partial rolling confirmation’ structure and provides cover on a shipmentby- shipment basis rather than on the entire order value. Spooner says the solution delivers significant cost reduction while retaining workable levels of export payment risk mitigation.
One million Euros of the risk mitigation backing provided by Lloyds Banking Group was underwritten by the UK’s export credit agency. This risk-share arrangement was Lloyd’s first transaction under ECGD’s Letter of Credit Guarantee Scheme (LCGS), a government scheme to encourage and support UK exporters.
A whole lot of brass
Brass intrusion SME McKechnie Brass has secured a £2.5 million invoice finance facility to support the company’s working capital position from Santander Corporate Banking Santander Corporate Banking has agreed to provide the lending facility and will also provide an invoice discount service, which will enable McKechnie Brass to receive prompt payments for their goods, improving their cashflow position.
McKechnie Brass Ltd is the last brass extrusion manufacturing company in the UK, using scrap brass sourced in the UK. The company was recently bought by Nick Harrison and Peter Brown and the pair has promised to expand the business.
Euro area recovery slows
Manufacturing throughout the eurozone has continued its recovery this month but the rate of growth is currently at its lowest since the beginning of the year, according to the latest data from business analysts Markit.
Markit’s Purchasing Manager’s Managers Index for euro area manufacturers fell to a level of 55.0 from 56.7 in July. Anything above 50 signals growth.
The pace of new order growth was the weakest in 2010 so far. Factory gate inflation was at a five month low and purchases prices fell to levels last witnessed in January.
Wheat shortage raises prices
UK food retailers and manufacturers are set to bear the brunt of a rise in global wheat prices following poor yields in Russia and Pakistan.
Following the worst Russian droughts for 50 years and the recent floods in Pakistan, the US government has slashed world wheat crop estimates. The US Agriculture Department (USDA) has reduced its forecast for the world wheat harvest by 2.3% to 645.73 million tonnes in its August report, below the 650.02 million tonnes traders expected.
Russia, the world’s biggest wheat exporter, has imposed a grain export ban which came into force on August 15. Concerns about the harvest in Canada and Australia have also increased grain prices, with wheat hitting a two-year high in the first week of August having risen more than 40% in a month.
Vulcan orders on the up
Vulcan SFM, Sheffield Forgemasters’ offshore specialist, has recorded orders worth £12.5m in the 2009/2010 financial year.
The demand for its products has reached unprecedented levels now that oil prices, decimated in the 2008/2009 global economic slump, have returned to more than $75 per barrel from a $40 per barrel low. This has encouraged oil companies to reinvest in production, with the company anticipating orders of £22m over the next 12 months.
US investment in UK wind
American Superconductor has announced it has acquired a 25% stake in Isle of Wight-based wind turbine company, Blade Dynamics.
The UK designer and manufacturer of advanced wind turbine blades sold the stake for $8 million in cash plus one seat on the company’s board.