Case Study: Purchase Order Finance for EN590 Diesel Shipment
Case Study: Purchase Order Finance for EN590 Diesel Shipment
A mid-tier energy trader secured a contract to supply EN590 diesel to a West African distributor. The supplier required upfront payment against release, while the buyer would only pay upon delivery into tank. To bridge the gap, Financely structured a Purchase Order Finance facility that enabled the trader to lift and deliver the cargo without deploying its own capital.
The Challenge
The trader needed to prepay the refinery for EN590 loading but lacked sufficient liquidity to cover the full cargo value. Traditional trade finance lines were unavailable due to jurisdictional risk and the client’s mid-sized balance sheet. Without purchase order finance, the trader risked losing the downstream contract and damaging its credibility with buyers.
Our Role
Financely packaged the downstream purchase order, structured the repayment mechanism, and secured a funding partner with appetite for petroleum trades. The arrangement was anchored on receivable assignment and title transfer, ensuring lender repayment certainty and supplier comfort to release cargo.
Solution Delivered
- Facility Type: Purchase Order Finance secured by downstream contract.
- Transaction Size:$14M equivalent EN590 diesel cargo.
- Security: Assignment of receivables, cargo title transfer, and insurance cover.
- Repayment: Direct settlement from the distributor upon discharge into tank.
- Jurisdiction: Load port in Europe, discharge port in West Africa.
Results
The purchase order finance facility enabled the trader to prepay the refinery, secure loading, and deliver the EN590 cargo on schedule. The distributor settled through the agreed offshore account, ensuring repayment to the funding bank. The trader completed the transaction profitably without overextending its balance sheet.
This case study is for informational purposes only and does not constitute legal, banking, or investment advice. Each transaction is subject to independent credit approval, compliance checks, and final documentation. Financely does not guarantee funding outcomes and operates strictly on a best-efforts advisory basis.
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