Ingram Micro was looking to set up a global notional cash pool that would give treasury the flexibility to move funds between entities without intercompany loans. While the obvious solution may have been to centralise all of the company’s cash management with one global bank, treasury was looking for an altogether different solution. The answer came in the form of an innovative – and now award-winning – global overlay structure from Bank Mendes Gans.
As Erik Smolders, Treasurer, Ingram Micro, neatly summarises: “The global notional pooling solution we have implemented helps the company to reduce cash while allowing all our operating entities full and immediate access to liquidity at all times. It replaces a system of intercompany loans that was not very flexible and required a significant amount of currency swaps to avoid currency exposures created by loans between legal entities in different countries and different functional currencies.”
By using bank accounts at Bank Mendes Gans (BMG), and the notional pooling structure offered by the bank, Ingram Micro can very quickly move cash collected from customers across countries and currencies to make payments to suppliers and keep idle cash as low as possible. Says Smolders: “With more than 200,000 customers across 160 countries, it is important for Ingram Micro to maintain access to in-country collection accounts with many global and regional banks. The BMG structure acts as an overlay structure, allowing us to perform global cash centralisation, while continuing to benefit from the collection and disbursement services of in-country bank partners.”