Working capital financing

A company can raise working capital by selling EUAs that are on their account during the year, and buying back the same amount of EUAs forward. By buying back the same quantity as it sells, the company does not affect its compliance position. By fixing the repurchase price at the time of sale, there is no price risk.

The effective cost of capital of financing via a repo depends on the difference between the forward price and the spot price of EUAs at the time of the transaction. Typically, the effective cost of funding is 5% - 7%. For companies which have difficulty raising finance this can be an attractive alternative to corporate debt.

Please download the VERTIS REPO TRANSACTION (PDF, 87.0 KB) product sheet.

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