The challenge
In November 2021, GE made the decision to split into three divisions. GE HealthCare (GEHC) was first to be spun-off in January 2023 and started its transformational journey. There was close to a year window in which to get the project delivered with the eyes of global markets, media and investors watching this high-profile transaction.
Given the complexities, both on the regulatory and operational fronts, with no two countries having the same set of policies, this project also had close attention from global, regional, and local senior stakeholders.
GE HealthCare had to review the treasury structures including legal entities, banking setups, processes, people and systems. Given the short turnaround time, GE HealthCare had to disintegrate from existing treasury setups as part of GE and reconstruct to be a standalone company with its own treasury structure and setup.
The solution
The team finalised their strategy to separate out the treasury processes and setup the functional and regional workstreams. Leading up to the spin-off, the focus was on legal entity restructuring, liquidity structures separation and banking set-ups.
GEHC developed the optimal cash management strategy for APAC and decided to establish a regional treasury centre (RTC) in Singapore. The company categorised cash consolidation in a two-tier approach. Firstly, domestic in-country consolidation of LCY and USD balances across entities across markets that are permissible based on their regulatory nuances. Secondly, a ‘follow-the-sun’ liquidity structure for consolidation of cash balances across the region.
GEHC also created a robust multi-currency notional pool structure with Citi to place on top of the regional liquidity structure in Singapore. The company also worked to achieve the desired outcome of having all required treasury and banking set-ups completed and tested prior to the spin off.
Credit facilities were right-sized and segregated for entities to ensure zero disruption to operations from day one and post spin-off the focus included creating GEHC’s own system, people and processes to build an independent treasury.
The APAC team was heavily involved in defining and implementing new processes including policies and standard operating procedures (SOPs) which are used as a benchmark for the other regions as well.
Best practice and innovation
While GEHC is now a standalone corporate, the key stakeholders were part of the core Asia treasury team in GE which enabled them to leverage prior experiences from past divestitures. GEHC not only leveraged and implemented best practices from GE treasury during this journey but also adapted to make a fit for purpose treasury for GEHC.
GEHC’s treasury framework includes both operational and business level considerations support revenue and the P&L objective.
The company’s journey to transform its treasury function from being a part of a large industrial organisation to a standalone healthcare company in less than a year has shaped a differentiated and efficient treasury structure in Asia Pacific. The treasury team has evolved from previous legacy platforms and processes to create and leverage best in class treasury management tools, solutions and processes, which signifies and justifies a key milestone for GE HealthCare’s transformational journey.
Key benefits
“Setting up GEHC treasury consequent to GEHC spinoff was the important milestone in the broader transformation journey. Successful completion of the project of this magnitude and in such a short span of time is commendable. The key element of the project was the way team collaborated with cross functional stakeholders within and outside the organisation and leveraged their expertise to achieve seamless execution. This has rightly positioned GEHC to embark on next phase of the transformation.”
Amit Grover, Regional Director Treasury, Intercontinental
