Following its acquisition by a financial sponsor, we were asked by a large Agrichemicals group to assist it to gain a better understanding of FX exposures and help manage the exposures arising from its operations in Europe, Asia, North and South America.
- Perform a qualitative analysis of the operational environment (via face-to-face meetings, teleconferences, and questionnaire-based interviews with commercial and finance staff based in the USA, Brazil and France);
- Gather quantitative data and develop a detailed FX model which identifies exposures both regionally and at a consolidated Group level;
- Act as interim FX risk manager and draft a detailed risk management policy document and establish regular currency cash flow and exposure reporting);
- Provide hedging advice to manage currency exposures arising from the mismatches between debt financing and EBITDA mix.
Results & Recommendations
Our qualitative and quantitative analyses enabled the business to gain a strong understanding of its FX exposures. Our subsequent provision of interim FX risk management expertise assisted the business to devise a sound FX risk management approach.