Lloyds Banking Group provides innovative funding facility to support ongoing overseas expansion

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Lloyds Banking Group supplies landmark export facility

The highly innovative growth finance we’ve provided is carefully matched with the business’ customers’ payment terms, and reflects our appetite to support local export manufacturers by structuring a market leading funding policy against export debtors.

Lloyds Banking Group has arranged an innovative funding facility to support the ongoing export activities and overseas expansion of President Engineering Group Limited (“PEGL”), the Sheffield-based valve manufacturer, which is backed by YFM Equity Partners.

Lloyds TSB Commercial Finance has supplied an export-focused confidential invoice discounting line, while Lloyds Bank Wholesale Banking & Markets has refinanced the business’ existing capital structure and provided a supplier import loan, alongside additional ancillary banking relationships.

PEGL consists of two core Group business units; Conflow and Bestobell Valves. The companies were acquired from former parent Flow Group as part of a management buyout supported by YFM in October 2010. In addition to its main site in Sheffield, PEGL has distribution and manufacturing sites in Pittsburgh, USA and Ahmedabad, India.

Founded in 1950, Conflow is renowned the world over as the leading supplier of specialist components and systems for dust and fire suppression, and all aspects of water control in the mining and quarrying industries.

Bestobell Valves, which was established in 1857, is one of the world’s leading providers of cryogenic valves to the industrial gas and the emerging liquefied natural gas industries. Bestobell valves are used in all aspects of liquefied natural gas (LNG) transport, storage, and processing.
PEGL employs approximately 120 people and exports its products to over 40 countries worldwide.

The package provided by Lloyds Banking Group includes a market leading export confidential invoice discounting facility from Lloyds TSB Commercial Finance. The landmark financing line will safeguard PEGL’s cashflow against international customers’ lengthier payment terms.

Lloyds Bank Wholesale Banking & Markets has provided a senior term loan to refinance the business’ existing capital structure, alongside ancillary banking facilities. The lender has also arranged a direct supplier import loan facility, which allows the business to advance the cost of materials to suppliers and repay the loan when finished goods are shipped to customers.

It will enable PEGL’s group companies to trade overseas with confidence and expand through fulfilling its strong order book, ensuring that the business is not negatively impacted by the long lead times between receiving materials from suppliers and providing finished products to its clients.

With support from YFM and Lloyds Banking Group, PEGL’s experienced industry management team will continue to build on the business’ reputation for high quality customer service and technical expertise, investing in further product development to meet the present and future needs of its core industries, as well as diversifying into new emerging sectors and geographies.

Mark Henley, Managing Director at PEGL, said: “China and Asia as a whole have an unrelenting appetite for energy, and the need for providers in these geographies to upgrade coal mining operations in line with improved safety standards is growing – creating demand for specialist products. Similarly, the rapidly increasing requirement for natural gas and its transportation across Asia, the Middle East, Latin America and Africa, as well as in emerging economies, will see demand grow for all our products.

“We are well positioned to capitalise on these positive sector dynamics to drive future growth, leveraging our market leading position, advanced manufacturing base in Sheffield and, now, this latest funding package from Lloyds Banking Group.

“By providing an integrated package which is suitably tailored and flexible, in line with our import and export requirements, the lender has illustrated its commitment to funding our long-term expansion ambitions.”

Andrew Gaunt, Associate Director, Business Development, Lloyds TSB Commercial Finance, said: “The highly innovative growth finance we’ve provided is carefully matched with the business’ customers’ payment terms, and reflects our appetite to support local export manufacturers by structuring a market leading funding policy against export debtors.

“Its use in this case highlights not only our confidence in PEGL’s model and management team, but also that tailored asset based finance funding solutions can effectively support UK-based growth firms’ export requirements.”

Adam Barraclough, Relationship Director at Lloyds Bank Wholesale Banking & Markets, commented: “PEGL is a highly ambitious, market-leading firm, with significant experience and capabilities in opening up new international markets, as well as diversifying its product suites to move with industrial advancement. This deal will further add to its ambition and capabilities, and we look forward to supporting the company in realising its growth plans.

“International trade is of fundamental importance to the long-term health and prosperity of the UK. We are dedicated to assisting growing UK businesses, such as PEGL, in the successful pursuit of international trade opportunities through appropriately structured funding.”

Mary Broadhead, Investment Director at YFM Equity Partners, added: “Since backing the MBO of PEGL in 2010, we have been delighted by its successful growth, which has resulted in the need to obtain new debt financing. Lloyds Banking Group has structured its facilities to provide the support needed for PEGL’s rapidly increasing export sales. We look forward to a successful relationship in the future.”

The provision of credit or leasing services by us is subject to you meeting our Credit approval. Please ensure that you only apply for credit or leasing services that you can comfortably afford.

Lloyds TSB Commercial Finance is a trading name of Lloyds TSB Commercial Finance Limited.

Lloyds TSB Commercial Finance Limited Registered Office: No. 1, Brookhill Way, Banbury, OX16 3EL. Registered in England and Wales no. 733011.

KIV LloydsTSB Commercial Finance Scotland Limited for BOS & possibly LTSB - 110 St Vincent St, Glasgow, G2 5ER.

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