Sale of receivables from the Spanish Public Health Care Sector. Cleaning up your Balance Sheet

Transcription

1 Sale of receivables from the Spanish Public Health Care Sector Cleaning up your Balance Sheet

2 Index i. Problem ii. Solution The Non Recourse sale of receivables to IOS Finance Key Accounting Considerations Flexibility of terms Main advantages of the Non Recourse Financing iii. Alternative products Receivables Management iv. Company and Principals credentials 1

3 High payment delays 2

4 Problem High payment delays by the Spanish Healthcare system (*) Source: Average IOS Customers Spanish Public Hospitals pay suppliers on average 245 days later. 3

5 Problem Resulting creditor problems i. Excessive working capital requirements to finance the delay capital tied up in overdue receivables returns below Weighted Average Cost of Capital of business negative impact on Performance Ratios ii. Excessive receivables balance deteriorates external credit ratings and has a negative impact in equity analysts reports iii. Ongoing need for in-house collection staff or outsourcing cost iv. Inefficient collection where Creditor does not have specialist Spanish speaking collection staff, resulting in excessive delays, and ultimately claim write-offs 4

6 The Non Recourse sale of receivables to IOS Finance 5

7 Solution The Product offered by IOS Finance cleans up the Balance Sheet True Sale of Spanish Public Health Care Sector receivables to IOS Finance in 3 simple steps: IOS Finance verifies the status of the portfolio following ISO 9001:2000 standards - Due diligence does not collapse Seller s organisation - No administrative costs Signature of the Assignment Contract; all risks and rewards are transferred from Seller to IOS Finance: True Sale (IAS-39 & FAS-140) IOS Finance pays to Seller the price stated in the Assignment Contract The complete process takes less than 60 days 6

8 Solution Key Accounting Considerations i. Complete transfer of all credit and collection risks and rewards to IOS Finance. ii. Price and payment terms fixed and determined at the selling date. iii. Contract terms have been developed in conjunction with leading Spanish accounting and legal advisers (BDO and Garrigues Abogados) in order to ensure comply with True Sale requirements under IAS and US GAAP. Copies of accounting advice provided to IOS Finance available on request. 7

9 Solution Flexibility of terms 8

10 Solution Flexibility of terms T-0 T-1 T-2 T-3 Day 0 Day 7 Day 59 Day 60 9

11 Solution Main advantages of the Non-Recourse Financing under IAS-39 i. To collect the receivables immediately, reducing cash flow uncertainties ii. Seller has no further obligations iii. Improves all the performance ratios in front of bank lenders and shareholders, reducing future financial costs and increasing shareholders value 10

12 Pure receivables management function 11

13 Alternative Products Alternative Products: Receivables management 12

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15 Company and Principals Credentials Our company 14

16 Company and Principals Credentials Staff Experience 15

17 Company and Principals Credentials Contact Us 16

18 Disclaimer The information and opinions contained herein were prepared by IOS Finance. The material is provided for information purposes only. It is not an offer or solicitation to enter into any agreement or contract with IOS Finance. Whilst all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions and expectations are fair and reasonable, IOS Finance makes no representation or warranty, express or implied, with respect to the fairness, correctness, accuracy reasonableness or completeness of the information and opinions but has obtained the information from sources believed to be reliable. Analyses contained herein are based on assumptions that if altered can change the conclusions reached. IOS Finance has no obligation to update, modify or amend this publication or to otherwise notify a reader in the event that any matter stated, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. IOS Finance is not acting and does not purport to act in any way as your advisor. We therefore strongly suggest that you seek your own independent advice in relation to any legal, tax, accounting and regulatory issues relating to the merits or otherwise of the products and services discussed. Financial instruments that may be discussed herein may not be suitable for all investors and any investors must make any investment decision using their own independent advisors as they believe necessary and based upon their specific financial situation and investment objectives. If a financial instrument is denominated in a currency other than an investor s currency, a change in exchange rates may adversely affect the price or value of, or the income derived from, the financial instrument, and any investor in that financial instrument effectively assumes currency risk. Prices and availability of any financial instruments described are subject to change without notice. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency, rate or other market or economic measure as past performance is not necessarily indicative of future results. This material and the information contained herein may not be reproduced in whole or in part without the prior written consent of IOS Finance. Copyright 2008 IOS Finance E.F.C., S.A. 17