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Home > Press > Extension of Financed Offtake Facility: INSCX™ exchange to increase investor ceiling for qualification to participate with its Structured Financed Offtake Facility to secure additional producer upscale capacity

INSCX™ exchange increases the minimum investment criteria and extends participation in its Structured Financed Offtake Facility (SFOF) to Global Capital Market participants to deliver additional capital resource to meet demand for listed NMs.

Extension of Financed Offtake Facility: INSCX™ exchange to increase investor ceiling for qualification to participate with its Structured Financed Offtake Facility to secure additional producer upscale capacity

Manchester, UK | Posted on July 5th, 2012

The Exchange Structured Financed Offtake Facility is a method provided to enable capital investors to support producer capacity to upscale to meet rising demand interest for listed nanomaterials on INSCX™ exchange. Commenting on the initiative, Gavin Leach, Director of Physical Operations stated:

"Efforts by the exchange to create natural industrial-scale demand for nanomaterials has created a situation, wholly expected, we might add, where producer members of the Exchange will require increased access to capital resource to finance upscale to deliver economies of scale to meet irrevocable commitments by converters to make payment versus delivery for materials supplied through the Exchange process. We now seek to expand this capital programme to include participation from international hedge funds, investment banks and professional investors to increase capital avaiability specific to enabling nanomaterial producers with the Exchange to compete to deliver upscale".

Minimum investor participation with the Exchange is now increased from USD$5m for organisations to USD$25m and a number of discussions are underway in London and New York to list a formal Bond Offering to support producer upscale on an RIE. "This is a clear opportunity for investors to profit from supporting the transaction in nanotechnology as opposed to pursuing the more riskier avenue of equity or VC investment, and much more suited as a financing methodology to emerging material proucers", Mr Leach added.

The initiative owes its origins to the purpose of a dedicated commodity exchage system, for any class of materials, including now with INSCX™, nanomaterials. The exchange process is designed to overcome the inability of emerging and existing material producers to tap supporting, non-leveraging or dillutive lines of capital to deliver supply certainty, economies of scale and capital security to drive greater industrial dependence on and support for te materials in question. The financing initiative in relation to nanomaterials is structured to enable capital investors to secure return by supporting the transaction as opposed to reliance on risk equity and/or high leveraging of emerging producers.

The process is referred by INSCX™ as a Structured Upscale Finance Dynamic (ISUD) based on the traditional financing role performed over decades by formal commodity exchanges. The process is particular to nanomaterials and other more traditional materials listed by the Exchange. The Dynamic itself is sub-divided into a Liquidity and Project Finance aspect. The latter aspect is referred to as Offtake where a commodity producer, registered and fully-paid up as a Commercial member of the Exchange, is either at pre and/or post-production stage of development and is able to secure a fundable offtake agreement with a reputable buyer, in the instance where the buyer is also fully registered and paid up as a Commercial member of the Exchange.

"In most cases thus far, the end converter is coming to the Exchange to be assured of supplier performance, material quality, insurability and regulatory compliance, and the Exchange trade desk is highly active in generating demand pull for nanomaterials, particularly in polymers, fuels and energy", Mr Leach added.

The transaction sequence is structured and executed through the Exchange enabling drawdown of capital to the producer for upscale purposes, while assuring the performance of the producer to the buyer, repayment of principal and agreed return to the capital investor supporting the transaction.

The Liquidity aspect is where an investor pool collaborating with the Exchange is offered an incentive to provide trade liquidity to non-commercial members or merchants on the Exchange to facilitate efficient trade. The Project Finance aspect is designed to achieve a number of essential aims:

-Overcome lack of capital sources appropriate to support emerging materials business
-Provide capital ability to producers to finance upscale without dilution enabling self-sufficiency and organic growth
-Provide Certainty of Performance and indemnification to the converter/downstream user
-Deliver on-site supervision of capital allocation provided to producers to perform in delivery
-Provide professional investors with a fixed return on capital employed reducing risk to principal investment
-Enable emerging materials to compete on an equal if not superior commercial footing to tap high-volume trade

Highlighting the relevance of the initiative, Mujdat Karatas, Head of Trading at the Exchange pointed to suggest; "This is about eliminating the commercial guess and hope aspect out of this industry, whether from the perspective of the producer, end user, capital investor or state oversight seeking return on R&D investment in nanotechnology to date. Demand is there for NMs but individual producers have to be geared to assure performance in supply and commercial obligation. Nanotechnology can deliver above average returns to investors; What has been missing is not any lack of potential, but a combination of producer inertia and no system to enable investor participation supporting the transaction through a structured process long proven to work across multiple materials industries, namely a Commodity Exchange."


About INSCX™ Exchange
INSCX™ exchange [Central Clearing Limited] is a commercial user commodity exchange for physical delivery of underlying materials against listed contracts. Registration Number: 07787171. Disclaimer: To the extent the user is entitled to disclose and distribute this document, the user may forward, distribute, and/or photocopy this copyrighted document only if unaltered and complete, including all of its headers, footers, disclaimers, and other information to appropriate parties only. INSCX™ exchange, Merchant Member firms thereof and/or Members admitted to the Official List [the “parties”] do not guarantee, represent, warrant, or otherwise guarantee, expressly or impliedly, the merchantability of material(s) supplied against contract(s), fitness for a particular purpose, or suitability of underlying material(s). The user is solely responsible for all determinations regarding any use of underlying material(s) supplied against contract(s) and any process in its territories of interest. The parties expressly disclaim liability for any loss, damage, or injury directly or indirectly suffered or incurred as a result of, or related to anyone using the underlying material(s). Exchange provision is enabled for user guidance on purchase of supporting Technical Support Contract(s) [TSC] relevant to the material(s) and reference to regulated and industry approved insurers. Listed contract(s) are not promoted as suitable for investment purposes, as defined by the UK Financial Services and Markets Act 2000 (Regulated Activities) provisions. Underlying material(s) delivered against contract(s) are subject to independent assurance to specification(s), good delivery, and in the case of engineered nanomaterials [NMs], compliance with Nanomaterials Safety, Health & Environment [SHE] good practices and INSCX™ “Track and Trace”.

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