Project

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Project Trade Finance
In Netafim around the world
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NETAFIM - Overview
Facts and Figures

• Largest low volume irrigation company in the
  world
• 2005 revenues - 359M
• 2006 forecast gt 400M
• Employees worldwide 2100
• Doing Business in 112 countries on 5 continents
• 35 subsidiaries
• 11 manufacturing plants

12 billion meters of Netafim drip lines can
circle the earths circumference 280 times or
travel to the moon and back 22 times
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NETAFIM - Overview
RevenuesIn millions of USD
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NETAFIM - Overview
International Presence
Manufacturing plants
11 plants worldwide Israel. (3 plants), USA,
India, Australia, South Africa, Brazil, China,
France, Chile.
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NETAFIM - Overview
Future Growth Engines

• New crops (Energy Crops)
• New Markets
• Gaining market share in existing countries
• New products ( develop or acquire )
• MAs ( markets and technologies )
• Operational excellence
• Project financing solutions

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Financial sources
NETAFIM Project Financing Solutions

• Shareholders / Owners Capital
• Vendor financing
• Third party financing
• Bank Loans (Buyers Credit)
• Leasing
• Governmental institutes (Municipality, State,
  Federal)
• World bank institutes (World bank, IFC, MIGA,
  EBRD, EIB, IADB)

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Letter of Credit
NETAFIM Project Financing Solutions

• The buyer asks his bank (the Issuing) to issue
  the L/C. The L/C is to be advised by the Supplier
  bank (the Advising bank).

L/C
Issuing bank.
Advising bank.
Buyer
Netafim
Supply agreement
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Promissory Notes
NETAFIM Project Financing Solutions

• The buyer is giving the Supplier P/N. On due date
  the Supplier presents the P/N in the bank for
  collection.

Bank
Collection
Customer
Presentation
Supply
Netafim
P/N
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Buyers Credit
NETAFIM Project Financing Solutions

• A Bank approved by the buyer and Netafim grants a
  loan to the Customer to finance the purchase of
  Netafim equipment.

Bank
Loan
Customer
Payment
Netafim
Supply
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Crates payments (1)
NETAFIM Project Financing Solutions

• Netafim and the customer sign a supply
  agreement.
• The distributor commits to support the customer.
• Customer signs P/N to support its commitment and
  installments. The Bank provides ICL.

Bank
Distributor in Other country
Irrevocable commitment letter
Irrevocable payment commitment letter per crate
Customer
Netafim
Supply agreement
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Crates payments (2)
NETAFIM Project Financing Solutions

• After the harvest, the Customer supplies the
  products to the Distributor according to their
  agreement.

Bank
Distributor in Europe
Deliveries
Customer
Netafim
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Crates payments (3)
NETAFIM Project Financing Solutions

• The Distributor transfers payments the payment
  is divided by the Distributor or by the bank.

Payment
Bank
Distributor in Other country
Escrow account
70
30
Customer
Netafim
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Umbrella guarantee (1)
NETAFIM Project Financing Solutions

• Netafim signs a supply agreement with the
  customer. Payment terms open account.

Bank
Distributor in Other country
Customer
Netafim
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Umbrella guarantee (2)
NETAFIM Project Financing Solutions

• The Distributor and / or the bank issue a
  Payment guarantee to support the credit.

Bank
Distributor in Other country
Customer
Netafim
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Umbrella guarantee (3)
NETAFIM Project Financing Solutions

• If the customer does not pay Netafim utilizes
  the guarantee.

Bank
Distributor in Other country
Customer
Netafim
Non payment
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Payment schemes
NETAFIM Project Financing Solutions
Umbrella guarantee Crates payments Buyers Credit Prom. Notes L/C Scheme
Bank Guarantee Harvest and others To be agreed with the bank Bank Aval N/A Securities
15 20-25 15 15 No need Advance Payment
Up to 3 years Up to 5 years Up to 5 years Up to 3 years Up to 5 years Total credit period
Up to 6 months Up to 12 months Up to 12 months Up to 6 months Up to 9 Months Grace Period
Quarterly or S.A. Quarterly and current Quarterly or S.A. Quarterly or S.A. Semi-Annual Installments
LIBOR 3.5-5 LIBOR 2.5-4 LIBOR 2-3 LIBOR 3.5-4 LIBOR 2 Interest
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Rolling the Financing the Distributor solution
NETAFIM Project Financing Solutions

• In Brazil, we are working with many
  Distributors.
• The Distributor would like to use our Financing
  capabilities to promote his sales of our
  products.
• We found a solution based on few critical items
• 1. The Distributor must be strong financially.
• 2. Our sales to the Distributor must be final and
  not B2B.
• 3. The Distributor must present list of
  customers, contracts amounts and credit terms.
• 4. The Distributor needs to provide acceptable
  collateral.

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Rolling the Financing
NETAFIM Project Financing Solutions

• Netafim signs with the Distributor, the
  Distributor signs with the customers.

Distributor
Financing Agreements
Farmer
Farmer
Farmer
Customer

• Financing Agreement

Netafim