Liquidity for Swiss exporters

On 1 January 2007, the Swiss Export Risk Insurance SERV superseded the Export Risk Guarantee ERG. SERV’s ten-year anniversary provides an opportunity to take an in-depth look at one of the most important updates – the introduction of so-called liquidity products.

Max Planck Institut from the outside.
Swiss Products for the Max Planck Institute.

SERV insures export transactions of Swiss companies against non-payment due to economic or political risks. SERV insurance can also be used before the actual export takes place. For example, if an exporter requires a bank loan to manufacture its products or provide its services, SERV can cover the risk of non-payment by the exporter vis-à-vis the bank. The bank can therefore be sure that the loan will be repaid. As a result of this, they do not require any further collateral from the exporter, which can finance its export business without any loss of liquidity; they may even receive better loan conditions.

The same applies when the exporter needs to provide the buyer with a guarantee. In such cases, the banks often require a cash amount to be deposited, which would reduce the exporter’s liquidity. If SERV covers the risk of non-payment for the exporter, the bank will often dispense with this re-quirement and the company can use the cash resources for the provision of its services.

Practical example Ampegon

Ampegon AG is a leading developer and manufacturer of radio communication and antenna sys-tems. It also develops and produces energy supply solutions for the operation of nuclear fusion systems and other scientific applications. The company is based in Turgi in Switzerland and has around 70 employees.

Energy supply for an environmentally-friendly power station

One gram of hydrogen could provide as much energy as eleven tons of coal – theoretically. In practise, however, this procedure still requires a lot of research. Helium is generated by fusing hy-drogen atoms, which releases a vast amount of energy. At the moment, this chemical reaction only takes place in one place - at the centre of the sun. The energy released there has enabled the sun to shine for billions of years. The Max Planck Institute for Plasma Physics in Greifswald (Germany) is developing a research facility based on the fusion process, with the aim of designing an envi-ronmentally-friendly power station. Ampegon is to provide the energy supply system for this re-search facility, which will cost around 2.8 million Swiss francs.

Ampegon did receive a deposit from the Max Planck Institute amounting to around one third of the order volume. However, the Institute did require an advance payment guarantee in return. The amount for such a contractual guarantee would only be provided by a bank if a cash amount was deposited or the credit limit was increased, which would have drastically reduced the liquidity of Ampegon. This liquidity bottleneck could however be avoided thanks to a counter guarantee from SERV. The counter guarantee of SERV provided the bank with 100% security and the required advance payment guarantee could be provided without the need to deposit any cash.

Valuable support from SERV

Ampegon has been working together with SERV since 2011. Susanne Stoll, Export Specialist, ap-preciates the know-how of the customer advisors at SERV in particular, who are always ready to help with any questions regarding financing. CEO Josef Troxler added: “SERV is an essential part-ner for us. Thanks to them we are able to take on economic risks which may otherwise break our neck.”

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