The Commercial Advisory Unit within SAFA provides a wide range of commercial advisory services related to financial and contractual arrangements between government and private entities, including industry assistance, Public Private Partnership’s (PPPs), electricity entities and the South Australian (SA) Venture Capital Fund. Examples of services provided follow.
Structuring financial support packages and fund guidelines
The Commercial Advisory unit within SAFA can assist state government agencies to structure arrangements for financial assistance under contract. The unit can also assist structure guidelines for Funds under which South Australian entities may be eligible to apply for government grants or loans.
Examples of Funds under the management of SAFA include:
- Unlocking Capital for Jobs
- Whyalla Small Business Loan Scheme
- School Loans Scheme
- South East Forestry Partnership Program
- South Australia Innovation and Investment Fund
- Small Business Development Fund
- Regional Development Infrastructure Fund
- National Bushfire Recovery – Small business assistance
The unit works closely with policy areas of government to ensure policy objectives for the State will be met when structuring fund guidelines and financial assistance contracts.
Due diligence assessments (commercial, financial, legal)
SAFA assists government make informed decisions by undertaking due-diligence assessments of entities prior to the awarding of contracts. The Commercial Advisory unit can assist with investigation of corporate structures, financial position, creditworthiness, commercial and operational status. The unit can also assess and appraise project proposals as part of its due-diligence assessment, and in particular identify strategies to limit the government’s exposure and mitigate risk. Members of the unit have significant experience participating as members of Assessment Panels and in forming recommendations for provision of assistance packages to government.
Contract formation, negotiation, restructures and settlement (recovery)
SAFA has prepared, managed, renegotiated and settled hundreds of financial assistance packages under contract. The Commercial Advisory unit has expertise establishing and negotiating contractual terms with counterparties and solicitors, and the preparation of appropriate documentation including letters of offer, term sheets and funding agreements. The unit manages complex contracts and financial arrangements, and can advise on whether contractual provisions are being met, and if not, what options may be available to remedy the default.
Examples of some of the industry assistance packages managed by SAFA include:
- Nyrstar Port Pirie - $291 million State guarantee over third-party financing (managed in conjunction with an across government steering committee);
- GM Holden Ltd - $30 million grant;
- Micro-X Limited - $3 million interest bearing secured loan
- Somark Group Ltd - $1 million grant, $4 million loan
- Radicalogic Technologies Pty Ltd - $200,000 small business development grant
The Commercial Advisory unit within SAFA has invested in systems and processes to prudentially manage hundreds of contracts. The unit has expertise in establishing processes and procedures to ensure contractual obligations are being met and conditions for the payment of grants and loans have been satisfied. The unit can also provide advice on appropriate processes in instances of contract default, including steps to remedy the default and recover assistance monies paid, and/or negotiate settlement and release.