Deutsche Bank has teamed up with GE Aero Energy to launch a risk management solution combining traditional trade finance and supply chain products.
Under the arrangement, GE Aero Energy will prepare the shipping documents required for payment under letters of credit, and where unavoidable discrepancies occur, Deutsche Bank will provide the firm with an accounts receivable purchase linked to the underlying letter of credit.
The tools will mainly be used on complex projects in emerging countries, accelerating payments and improving working capital.
Jon Richman, head of trade finance and financial supply chain Americas, global transaction banking, Deutsche Bank, tells GTR: “The trade finance industry is constantly evolving to create new solutions. We are combining a number of existing capabilities across documentary trade and financial supply chain, and also linking these with Cash Management and FX offerings to generate more value for our clients. We believe these solutions are applicable to many companies, especially those engaged in large scale projects or exports to emerging markets.”
Stephen Veigel, commercial finance and risk leader at GE Aero Energy, says: “Through our relationship [with Deutsche Bank], we have been able to reduce payment risk as well as accelerate the long-term cash flows associated with the substantial investment that is required for each GE Aero Energy project.”
GE Aero Energy is a General Electric Company business that manufactures gas turbines and other power equipment.