IRCA Group was highly commended for a fixed-rate supply chain finance (SCF) programme that enabled the Italian food ingredient company to extend its days payable outstanding (DPO) from 60 to 90 days while helping stabilise financing costs for its suppliers.
Judges were impressed by the tangible wins of the solution – which was also one of the first major SCF programmes for a lower-rated private equity-sponsored company – and the creative thinking it demonstrated.
Aiming high
IRCA – which was acquired by private equity company Advent Group in 2022 – was looking for a way to elevate its working capital management practices to match those of its higher-rated peers. In particular, it sought to boost its DPO and diversify its funding sources to include non-bank institutional investors, so SCF seemed a good fit. But IRCA was aware of interest-rate risk being a key concern for auditors, so it wanted to mitigate that by securing more predictable financing costs.
Success all round
In stepped Orbian with its Fixed Rate SCF solution, which enables suppliers to pay the same financing rate for up to five years. With high supplier participation, the programme ramped up quickly. This allowed IRCA to achieve its goal of extending its DPO to 90 days – a factor that won praise from judges.
In another win, the programme is also funded by non-bank institutional investors. By giving IRCA access to a deeper and broader funding pool while allowing it to preserve its existing credit lines, the programme has boosted its financial and operational resilience and positioned it to compete more confidently with its bigger rivals.