Supply Chain Finance (SCF) has been developed in order to optimize the conditions of the payment terms with selected LUKOIL suppliers. The SCF Program allows our suppliers to get access to funding from financial institutes – partners of program at highly attractive conditions, under the pledge of revenue, or assignment of claims under a contract with LUKOIL.
The implementation of SFC will improve the efficiency of interactions between LUKOIL and its own suppliers.
Advantages for LUKOIL suppliers upon participation in SCF:
Less documentation (compared to other banking instruments)
Attractive discount rate
Additional funding source
Suppliers must have contracts for a total amount of more than 30 mln. Rubles.(or an equivalent sum in another currency)
Suppliers must have an amount of account receivables from LUKOIL totaling more than 5 mln. Rubles.(or equivalent in another currency)
Some suppliers may be able to join the SCF program if their contracts total an amount less than 30 mln. Rubles.
Payments conditions between LUKOIL and suppliers should correspond to common market practice.
Suppliers with contract terms of:
Amount of funding – 100 mln. Rubles.
Payment due in 90 days
Difference between using other financial instruments compared to SCF – 5%
Reducing the cost of financing 100 000 000 * 0,05 * 85/365 = 1 164 384 rubles
Additional cash flow totaling 100 000 000 mln. Rubles.
Reducing the requirement of financing from other sources: 100 000 000 * 85/365 = 23 287 671 rubles
Request for participation in the Program or for additional information could be sent to the following contacts.