Cash & Liquidity Management

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Enhancing Project Success for Innovation, Efficiency and Competitiveness In this article, the authors look at some of the techniques in which treasurers and their teams, corporate and/or project finance managers can leverage their innovative transaction banking services to support capital projects whilst remaining aligned with the company's balance sheet and working capital objectives. In doing this, the authors make in depth references to three case studies that concern securing long-term capital and supplier financing programmes.

Enhancing Project Success for Innovation, Efficiency and Competitiveness

Featuring Michael Guralnick, Global Head, Client Sales Management, Global Transaction Services, Citi  and Swati Mitra, EMEA Region Head, Corporates, Client Sales Management, Global Transaction Services, Citi

As multinationals accelerate their strategies to further globalisation and expansion into the emerging markets, they continue to invest in major capital expenditure projects that are key to establishing and building out local manufacturing and production facilities. These critical investment projects are designed to enhance competitiveness by improving productivity, optimising cash generation, and driving increased cost-effectiveness. In the highly competitive global business environment every company needs to prioritise its investments, mitigate project risk and ensure that financing is aligned with forecasted returns. As such, Citi’s Global Transaction Services business is a key partner to its clients throughout the project lifecycle - from development, construction to operational phases - providing customised solutions to assist its partners in ensuring a successful outcome of their investment. This article looks at some of the techniques in which treasurers and their teams, corporate and/or project finance managers can leverage innovative transaction banking services to support capital projects whilst remaining aligned with the company’s balance sheet and working capital objectives.


Changing influences in project selection, financing and ongoing cash management

The role of treasury has changed considerably since the global financial crisis. As the events of late 2008 and early 2009 unfolded, treasury’s role became pivotal in ensuring sufficient working capital during a period of cash flow and income volatility. CEOs and CFOs became much more cognisant about recognising treasury’s value in managing market, counterparty, sovereign and concentration risk.

Capital projects typically do not have a single owner within a company, with project finance, internal venture capital, the commercial business, corporate finance, treasury and strategy groups all represented. Although the treasury implications of capital projects have always been considerable, financing costs and liquidity implications have become more relevant in the overall budget and cost benefit analysis given the shifts in bank funding and capital markets. Treasurers are therefore now playing a more leading role on project committees to align project risk mitigation, financing and operating cash requirements with the wider strategic agenda.

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