FEERUM signed with EPICENTR K LLC from Kiev, two large contracts for the sale of cereal silo complexes, with a total value of nearly EUR 50 million (PLN 209.8 million). The implementation of contracts will mean a significant increase in the company’s results.
The first contract, for an amount of 35.6 million euros, provides for delivery of five silo complexes by October 1 next year. The second, worth 13.3 million euros, is to be completed within 9 months from receiving the advance payment. Deliveries will be effected in western Ukraine.
“This is another big step in the development of our company after we have signed a contract in the African market. The value of two new contracts with a Ukrainian partner amounts to nearly PLN 210 million. These are contracts that are significantly larger than the African project. Thus, Ukraine will soon be the leader among our foreign partners,” – said FEERUM President Daniel Janusz.
Recently, Ukraine occupied the third position among the company’s export markets. The first place went to Tanzania and the second to Lithuania.
“The entry into force of Ukrainian contracts will mean a surge in the Group’s revenues. We are implementing the earlier announcements that assumed a dynamic increase in the scale and range of the company’s operations “- – said Daniel Janusz.
FEERUM, as part of its contractual obligations, will design, manufacture and supply silos to the indicated locations in Ukraine, as well as provide warranty service and training for the ordering party’s employees. The company will not be responsible for the assembly and commissioning of the silos supplied.
The condition for the entry into force of the contracts is the Export Credit Insurance Corporation (KUKE) taking the final and binding decision on the insurance of receivables under contracts, on December 24, 2018, respectively (in the case of a contract worth EUR 35.6 million) and by May 31 2019 (in the case of a contract worth 13.3 million euros). Failure to meet the above condition on the dates indicated will result in expiration of contracts.
“We are very advanced in conversations with KUKE regarding the insurance of receivables. On the day of signing the contracts, we received a letter of intent confirming the intention of KUKE to insure our receivables in the dates provided for in the contracts “ – said Daniel Janusz.
Obtaining the insurance policy of KUKE will enable the ordering of the so-called “Supplier’s credit”. Under this financing scheme, payment of 85% of the price will be postponed and will take place in semi-annual installments payable within 5 years after the execution of contracts by FEERUM. On the other hand, FEERUM will be able to sell its undue receivables with an appropriate discount to a selected bank or financial institution.
The contracts also provide for FEERUM to receive advance payments of 15% of the contract value.
Publication date: 30.11.2018