Tao Zhu Gong Awards

HIGHLY COMMENDED Top Funding Solution China Southern Airlines Judges’ Comments This is a low-cost, innovative and effective solution for financing, which has satisfied the needs for daily operating capital. In the domestic aviation industry, it’s financing best practice. Company Profile Headquartered in Guangzhou, China Southern Airlines (hereinafter referred to as China Southern) is the world’s fourth biggest airline. It is also the airline with the largest number of aircraft, the most developed airline network, and the largest annual passenger volume in China. Challenges China Southern’s major suppliers provide fuel, aircraft and engines, as well as airports, maintenance, repairs, catering, ground services, and so on. These suppliers, especially fuel suppliers, have a strong bargaining advantage, and they normally require timely payments. Fuel procurement also accounts for the largest portion of China Southern’s overall operating costs. As of 2O17, rising fuel prices have caused considerable pressure on the airline’s revenue and working capital management. “We were in urgent need of a stable, low-cost, short-term financing solution to meet the need of monthly fuel expenditures and reduce our overall financing costs,” said Wang Xiaofeng, Manager of China Southern’s Capital and Risk Management Office. Solution In the first half of 2O17, especially in Q1, RMB liquidity in China’s domestic market was very tight and the cost of RMB financing was very high. Many financial institutions had very limited asset quotas which made it difficult for them to support the working capital requirements of their customers. China Southern hoped to find a solution that would be both flexible and stable to ensure the required amount of capital at a low cost, and the ability to extend the loan under reasonable circumstances. At the same time, they also required a simple and efficient process for timely payments. Citi’s trade finance solution for RMB accounts payable met these requirements precisely. Innovation and breakthrough 1. Flexible maturity period of financing: The maturity period of the financing project is 18O days, which meets the trade financing requirements. Companies can choose different repayment periods within this time frame and enjoy the lowest interest rate within 6 months. Additionally, if required, companies can also opt for an extension. 2. Competitive prices: Citi is the first foreign bank to provide such a flexible financing solution. Its financing rate is the best among all banks, even when RMB liquidity was very tight in Q1 of 2O17. 3. Process streamlining: Citi’s electronic platform saves a lot of time for customers when preparing payment procedures. 4. Account opening requirements are simplified: The financing solution does not require a customer to open another loan account. Wang Xiaofeng said: “Implementing this project has greatly helped the company’s short-term turnover and supplemented the company’s working capital requirements.” 重点推荐企业 最佳融资解决方案奖 中国南方航空公司 评委点评 低成本、创新型的贸易融资方案，有效满 足企业日常营运资金需求，是目前国内航 空业日常融资的最佳实践 企业简介 总部位于广州的中国南方航空公司（以下 简称“南方航空”、“南航”）是全球 第四大航空公司，也是中国运输飞机最 多、航线网络最发达、年客运量最大的航 空公司。 挑战 南方航空的主要供应商为其提供燃油、飞 机和发动机，以及机场、维护修理和运 营、餐饮和地面服务等等。这些供应商通 常有很强的议价优势，特别是燃油供应 商，对付款的时效性要求很高。而燃油采 购也占到南航整体营运成本的最大部分。 从2O17年开始，燃油价格不断上涨，给 航空公司的收入和营运资金管理造成了不 小的压力。南方航空资金与风险管理室经 理王晓风说，“我们当时急需一种稳定 的、低成本的短期融资方案，以满足每月 的燃油支出，并降低整体财务成本。 解决方案 鉴于2O17年上半年，特别是第一季度， 中国境内市场人民币流动性紧张，人民币 融资成本非常高，众多金融机构的资产配 额都非常有限，难以支持客户的营运资金 需求。南方航空希望该融资方案能兼顾灵 活性与稳定性，既能保证资金量的要求， 也能保证成本的低廉，在合理合规的情况 下直接展期。同时，他们也要求流程简便 高效，能实现及时付款。 而花旗银行为其提供的这个人民币应付 账款的贸易融资方案，正好满足了这些 要求。” 创新与突破 1、融资期限灵活：该融资项目的期限为 18O天，符合贸易融资的规定。而企 业可以在这个范围内选择不同的还款 期限，并享受6个月内的最低利率。 同时，如果有需求，企业也可以选择 展期。 2、价格具有竞争力：花旗是第一家提供 这种灵活融资解决方案的外资银行。 其融资利率在所有银行中都是最好 的，特别是在2O17年第一季度人民 币流动性非常紧张的时候。 3、流程简化：花旗的电子平台为客户准 备付款手续节省了大量时间。 4、开户要求简化：该融资方案不要求客 户另外开立贷款账户。 王晓风说：“该项目的实施对公司的 短期周转起到了很大的帮助，补充了 企业流动资金的需求。” BENEFITS FOR THE COMPANY • This solution met China Southern’s need for working capital with low interest rates and high amount limits. • The withdrawal process was simplified and there is no need for the company to open additional loan accounts. • Flexible and adjustable maturity period for financing. 企业获益 • 实现本外币之间的自由调配和兑换； • 集团总部实现以人民币形式的跨境资金融通； • 打通集团内部资金调配渠道； • 为打造全球财资管理中心奠定基础。 Wang Xiaofeng Manager, Capital & Risk Management Office, China Southern Airlines 南方航空资金与风险管理经理王晓风