Empresas Iansa manages its securitized bond issuance process with solution developed by Novis

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In the current global environment, access to financing can be a challenge for many companies. In this sense, Empresas Iansa has opted for a new way: the issuance of a securitized bond. To carry out this process efficiently, they trusted us, as Novis has been their SAP partner for more than 15 years. Together we have developed a solution that automates and efficiently manages the flow of information and document squaring. Thanks to the successful implementation of this project in 2022, Empresas Iansa was able to implement in a timely manner the technological challenge that the financing required.

Background

Empresas Iansa S. A. is one of the main agro-industrial holding companies in Chile. Iansa, one of its main brands, is the most important producer, distributor and marketer of sugar and other natural foods in the country. The company grows and buys sugar beet, working closely with farmers in south-central Chile, producing sugar that goes to the final consumer or, in bulk and in large volumes, to industrial customers.

Empresas Iansa also has a consolidated position in other areas. It stands out in the production and marketing of animal feed, from beet by-products, where it occupies a prominent position in cattle and horse feed in the country. It is also a relevant producer in the manufacture of pet food. In addition, it has achieved an excellent position in concentrated fruit juices, in the commercialization of agricultural inputs. Finally, it stands out in the production and sale of traditional and organic tomato paste, a business that is developed in Peru and Chile, being today the 25th producer worldwide.

At the shareholders’ meeting held in April 2023, the company indicated that its results for 2022 were the highest in the last eight years. Pablo Montesinos, general manager of the company maintained that “this year we continued working on achieving the objectives defined in our five-year Strategic Plan, initiated in 2019, in a context marked by a complex economic reality, an international war that has affected prices and the availability of certain products, and a particular political scenario. We have been able to adapt to the cycles and continue to grow and position ourselves as a food company with a clear purpose: to feed Chile and the world with the best of our land.”

Finally, the company reported that the 2019-2024 Strategic Plan, with investments of US$108 million, has been fulfilled and will continue to strengthen production processes, promoting innovation, business development of Patagoniafresh, Icatom, Animal Nutrition, Food Ingredients, and branded product lines for mass consumption, all of the above, always with a focus on a culture of excellence and sustainable development. Source

The securitization process

As part of the financing of this plan, Empresas Iansa issued securitized bonds in 2022 in agreement with EF Securitizadora. This involved the sale of the portfolio of all Iansa’s businesses to a third party, which required the transfer of some 15,000 sales documents per month from the five subsidiaries of Empresas Iansa to the securitization company.

For this it was necessary to implement the securitization process*, for which Empresas Iansa asked Novis to develop an interface, capable of carrying out the flow and squaring of documents in an automated and efficient way, with adequate management tools to coordinate the different areas of the company and the securitizing entity, as well as the intermediary that audits and validates the process.

Viviana Romero Ochoa, Assistant Manager of risk and credit at Empresas Iansa – the area that requested the project – and who played the role of project leader on behalf of the business, says: “It was an important project, complex because of the heterogeneous nature of the companies involved, all with different client portfolios, and stressful because of the deadlines. It was a learning experience for all of us, for Novis and for the securitizing entity and the intermediary. We had no previous experience, so we had to understand and bring together the finance teams of all the Empresas Iansa companies to meet the requirements of the process. The survey took us at least six months, during which time we realized that to move forward with the project we would need a customized solution and the support of an SAP partner with a lot of experience and flexibility, as we discovered together what would be the most appropriate way to do it. We did it and now the process is flowing perfectly”.

Francisca Araya Muñoz, Head of Functional Support and Continuous Improvement at Empresas Iansa, emphasized that: “Novis assigned a highly professional team of consultants, who worked with a collaborative approach and with the willingness to put themselves in the client’s shoes. As a result, they were able to fully understand the complex and lengthy process, which involved several stages, implement it in SAP, and manage the proper management of the flow of documents between the actors in this operation: the five Empresas Iansa companies with all the areas involved, the intermediary and the securitizing entity”.

In turn, Mary Valderrama Zerpa, Project Manager of the Empresas Iansa systems team, who worked hand in hand with Novis during the execution, was also very satisfied with the process and emphasizes that “in the start-up there were moments of tension where it was necessary to act quickly to perform maintenance, and the Novis team responded not only with great agility, but also with the tranquility necessary to find the best solution to each challenge. The consultant in charge of the project was proactive and a great contribution to us. We are very grateful.

In Viviana Romero’s opinion, the project was very successful, “because from the very beginning there were very few errors, considering the large volume of invoices and other related documents, and what’s more, three months ago we managed to reduce them to zero. I am very happy with the result.

In an increasingly competitive market, operational efficiency and agile decision making are critical to business success. Novis prides itself on helping its clients optimize their processes and improve their performance.

If you would like to learn more about our process automation solutions, please contact us today.

Article by Gilda Valderrama, Novis Newsletter editor.

*About securitization:

Securitization basically responds to a financial structuring of cash flows from assets backing the issuance of securities in the stock market. It consists of gathering and grouping a set of credit assets, generally payment flows, to serve as backing for the issuance of negotiable securities in a secondary stock market or over-the-counter market.

In other words, securitization consists of transforming payment flows of a heterogeneous nature into a marketable, liquid security with a known level of credit risk.

To achieve this, a credit originator that holds the payment flows in its assets, agrees with a specialized entity, which in Chile is called a “Securitization Company”, to issue debt securities backed by the flows of those assets.

The Securitization Company issues debt securities, each of which represents the right to receive a portion of the stream of payments generated.

This process generates added value to asset-backed credit operations, improving the capital structure, indebtedness, and liquidity of the originator, expanding financing possibilities, which requires effective and expeditious processes, with rigorous control, allowing any company with significant credit flows to access the institutional investors’ market.

It is an activity regulated by the Securities Market Law, and operations may only be carried out by companies with an exclusive line of business registered with the SVS, which operate through separate assets (affectation assets) (Source) (Source)

Related Note:

Empresas Iansa integrates new sales channel with Mercado Libre