Prior to the spin-off, Vernova businesses held 16 of the cash pooling structures in MENA, with sweeps in place between UAE, Kuwait, Bahrain and Qatar; six of which were USD structures and the remaining ten were local currencies. The company separated this liquidity for USD from three different legal entities (obtaining cross-border tax approvals for their final change to be able to consolidate their USD balances), under one centralised entity, which will help achieve maximum concentration of dollars to their centralised pool. This includes 24 legal entities (multi-entity structures) and approximately 27 accounts. The consolidation of these structures took less than ten months to implement. This transformation required tax approvals to allow funds to contribute to the global ‘follow the sun’ pool, without withholding tax. This also required a considerable amount of work on assessing intercompany laws given the jurisdictions that the pool covers.

Historically, GEV has been unable to automate the movement of cash out from the Kingdom of Saudi Arabia (KSA), the client has now begun to implement domestic sweeps in the Kingdom. Whilst this has not been enabled (currently under implementation), automated movement of funds inside KSA will allow GEV to centralise it’s Saudi Riyal (SAR) and USD locally. The funds can then be easily moved either to UAE or Ireland via a manual transfer. The addition of this domestic pooling structure allows GEV to release US$8m cash from its existing operating cash buffers.

GEV uses MT940 end-of-day reports to report its cash positions for 792 HSBC bank accounts held globally. The reports are delivered centrally to a HSBC Global Information Report (GIR) and then delivered to their own Swift BIC.

This was the first time GEV had conducted a spin-off this size, therefore there was a lot of pressure to get this right. It was also critical to obtain an IG rating for the spin-off.