Electric Turbine Modernization
Deal Size: $5,250,000
Funding Requested: Cash Funding
King Trade Capital (“KTC”) was approached by the CFO of an industrial supply and service company based in Houston, Texas. The $30 million a year company was looking for a fast solution to finance a project in Mexico.
The company is very active in Mexico providing industrial equipment and technical project expertise to the petrochemical, electrical and water industries. All three of these industries are predominately state owned companies with enormous capital improvement budgets and long lead time bidding processes.
When KTC was contacted, our client was currently in the middle of a $60,000,000 plant construction project for PEMEX (the national petrochemical company of Mexico) and even though they were receiving progress payments, they had very limited resources for that project.
While they were in the middle of completing the PEMEX project, the client won a bid to modernize 4 electric turbines for CFE (the national electric company of Mexico) in Tula, Mexico. They hoped that the cash would become available from the PEMEX project, but it never was sufficient to be able to start the CFE project. Our client was at risk of losing the CFE contract if they did not get started soon.
The CFE project was turn key, with no payments made until completion and successful testing. The project included the purchase of equipment from Swiss, US and Mexican suppliers and the contracting of companies to install the Swiss equipment, build and install a water treatment plant, water storage tanks as well as install and route piping and electrical to all 4 existing turbines.
KTC quickly assessed the project, timeline and costs, considered the cross border risks, visited the site and structured a funding that allowed the client to save the contract and the project.
The project took several twist and turns, as most projects do, but ultimately after 18 months the job was completed successfully.
KTC’s financing allowed our client to complete a project they otherwise could not have completed because of lack of capital. KTC’s financing saved our client’s relationship with CFE and has allowed them to get other large projects.