News Review: EFIC supports Ferra's JSF work | ADM Mar 2011
The Export Finance and Insurance Corporation (EFIC), the Australian Government’s export credit agency, is supporting Brisbane-based Ferra Engineering Pty Ltd with working capital to help the company deliver on a sub-contract to supply parts to the F-35 Joint Strike Fighter (JSF) project.
EFIC has provided a $2.7 million export working capital guarantee to Ferra’s bank, Westpac, enabling the bank to lend this amount to Ferra to assist in financing the sub-contract.
Ferra, a specialist manufacturer of aerospace structures and sub-systems, has secured its third contract to manufacture, assemble and test weapons bay adapters, the mechanisms to hold and release the munitions carried internally by the JSF. Ferra is the only company worldwide approved by Lockheed to make and assemble weapons bay adapters for the JSF program.
While Ferra’s work involves substantial costs for materials and labour, it will not receive payment under the sub-contract until after the parts are shipped. This means that the company faces a working capital shortage and requires additional funding to perform the sub-contract.
With support from EFIC, Westpac was willing to provide a loan for working capital to Ferra. EFIC’s export working capital guarantee gives the bank a guarantee for repayment of the loan.
“We’ve completed similar sub-contracts for the JSF project, so we’re confident of our technical ability to deliver,” Mark Scherrer, Ferra’s managing director, said. “But with these large orders, maintaining cash flow throughout the sub-contract can be a challenge and that’s where the assistance of EFIC and Westpac has been invaluable.”
“SME exporters often find there’s a mismatch between when they do work for an overseas buyer and when they get paid for it,” EFIC’s executive director, SME, Andrea Govaert, said. “EFIC’s export working capital guarantees can help bridge that gap and keep funds flowing. Ferra
is a highly successful business in a niche area and we’re delighted to support its export growth."