European Cash Management
The benefit of releasing trapped cash
The merging of five PE-backed packaging businesses into a single entity, with 150 accounts in 30 banks across 14 countries, created the need for an efficient method for gaining visibility of cash and the pooling funds across Europe.
Deloitte acted as both treasury and tax advisors to this business, initially developing the strategy and selecting the best bank solution, then driving the implementation of a European wide cash management solution. The advice from Deloitte enabled the client to realise significant cash savings and release previously trapped cash to further grow the business.
The work conducted by the team will enable the company to release c.€30m, which will be used to reduce debt or for future investment in the company.
This will result in interest savings of c.€550k from the proposed cash management solution which presented a very strong business case for the relatively small investment in infrastructure.
Due to the nature of the combined business and a recent financing, complex structures exist within the debt funding. Our experience with cash pooling structures enabled the client to overcome the issues posed to allow implementation to occur.
The company benefited from our in-depth of knowledge of cash-pooling banks within Europe
- We were able to directly target those banks who are able to provide suitable, with the chosen specialist bank previously unknown to the client.
- During the selection process the team’s expert guidance allowed the client to recognise potential pitfalls and thus eliminate unsuitable banks.