Best practice and innovation

Demonstrating best practices and innovation, T7 has worked with UOB Malaysia to arrive at a carefully crafted trade finance solution that optimises financing costs. T7 only pays for the funds utilised for supplier payments, saving on unnecessary expenses compared to traditional term loans with bulk drawdowns.

In a commendable display of efficiency, the documentation process is also simplified. Recognising the significance of promptly identifying suppliers, the drawdown documentation was streamlined, ensuring a swift turnaround without compromising risk management and mitigation efforts.

The solution demonstrates innovation as it goes beyond conventional trade finance offerings. Considering T7’s unique business requirements, interest rate swap options were introduced. This valuable addition empowers T7 with the right, though not the obligation, to enter an interest rate swap on agreed future dates, all under terms protected by the swap option.

Key benefits

• Return on investment (ROI).

The solution’s ability to bridge the long tenor working capital gap for the contract showcases its efficacy in handling complex financial challenges. Not only does it provide the necessary funds, but it also does so in a manner that minimises financing costs, demonstrating financial prudence and foresight.

“Furthermore, the solution’s innovative feature of monetising five-years’ worth of lease payments from the awarder under the second tranche is truly remarkable. This approach creatively leverages future income to repay the initial tranche, ensuring enhanced cash flow for our business post-commissioning of the monetisation of the mobile offshore production unit (MOPU).”

Ong Fee Peng, Group Chief Financial Officer