Frédéric Mille, Advans Group’s Head of Investments, talks about the role of the Investment Department, the recent funding the group received and the future focus areas in terms of securing financial support.
What is the role of the Investment Department?
The Investment Department is in charge of supervising the governance of Advans and its subsidiaries and the overall funding (debt and equity) of the group with the exception of Amret which manages its funding independently. It also oversees the implementation of the strategy ensuring that the performance of each subsidiary meets strategic orientations. In addition to that the Investment team, consisting of 9 people, assists subsidiaries and other departments in all their legal issues (review of contracts, legal advisory, compliance). We are in close contact with the CEOs and the Chief Financial Officers of our subsidiaries.
Could you tell us more about the funding that Advans received in the past year?
Total borrowings in our greenfield subsidiaries amount to around € 80 million. Last year this figure remained relatively stable because of the Covid 19 crisis which impacted our level of loan disbursements. As a consequence, we mainly focused on renewing loans maturing during the year. We also worked on reinforcing the group’s ability to support its subsidiaries, managing to raise € 12 million of additional debt from long standing partners (Frankfurt School and BiB) that was then used to strengthen the capital of several subsidiaries.
What impact has the Covid 19 crisis had on securing financial support for Advans?
The team worked hard last year to ensure that there would be no liquidity crisis due to the effects of the pandemic. Lenders were definitely more cautious and needed to be reassured about the group’s ability to respect its repayment obligations despite the challenging context. We had a lot of discussions with lenders to negotiate debt renewals. During the year, several ‘stress tests’ were required in order to demonstrate that, despite the crisis, the group’s solvency and liquidity remained at acceptable levels. And I am happy to say that not a single lender withdrew their support. On the contrary, we benefited from a phenomenon that is known as ‘flight-to-quality’: in uncertain times investors prefer to work with a strong and reliable partner like us.
How have Advans’ financial partners supported the group during the ongoing crisis?
In addition to loans, our financial partners can provide technical assistance support. This was particularly the case last year with several of our shareholders, like CDC Group and FMO, providing grants for programs aiming to support our clients during the Covid 19 crisis and in its aftermath.
As activity is resuming in our subsidiaries and disbursements are going back to pre-Covid levels we will focus on increasing our borrowings again, with the intent to decrease their cost. We will continue to work with our historic partners but will also look at new lenders and innovative solutions.
Frédéric Mille joined Advans in 2018 as Head of the Investment Department. With his team he is in charge of governance, investment, strategy and legal for the group.