Edmonton-based, family-owned golf course builder won a bid to build a championship course in New Zealand but needed to cover all the risk
EDMONTON—Sid Puddicombe and Associates Ltd. (SPA), a family-owned golf course design and construction firm in Edmonton, has won a deal to build a championship golf course in New Zealand.
The contract with the New Zealand buyer required a performance bond—a form of protection for the foreign buyer in case the project is not completed according to plan.
The bond, which was provided by EDC, helped SPA compete for the contract against much larger companies.
“I never knew this type of facility existed and it was a great fit for our company. It allowed us to compete with the biggest of players, anywhere in the world,” said Grant Puddicombe, managing director of Puddicombe Golf.
SPA had a hard-won opportunity on a significant overseas project. However, when when the deal came down to a $1.2 million bond, the company needed help.
“The facility that EDC put in place allowed us to both manage our cash flow and provide the developer with the assurance that we were backed. This kind of bond made our customers, and our bank, very comfortable with our project,” said Puddicombe.
EDC is Canada’s leading provider of financing, insurance and bonding products for small Canadian companies that have contracts or business outside of Canada.
“This type of bond is not uncommon, and when the banks of bigger foreign buyers see a small family business taking on a multi-million dollar project, regardless of their excellent track record, they will want to protect the total investment,” said Françoise Faverjon-Fortin, vice-president of Contract Insurance, Bonding and Political Risk Insurance at EDC.
“EDC’s bonding products help small companies like SPA manage the costs of bidding and winning contracts,” Faverjon-Fortin added. “Without these bonds, small companies could have no other choice but to use their cash reserves in the amount of the bond request, which can be a tremendous burden on the company.”