CTDI: Simplifying liquidity management

About CTDIFounded in 1975, CTDI is a full-service global engineering, repair and logistics company providing solutions to the communications industry. Customers include the major wireline and wireless telecom carriers, cable service providers and major OEMs around the world. Headquartered in West Chester, PA, the company today has more than 14,000 employees in over 90 facilities worldwide. In Europe, more than 4,600 employees provide cost-effective end-to-end solutions out of 14 countries. CTDI’s European headquarters is located in Malsch, Germany.

The Business RelationshipIn 2016, CTDI acquired Regenersis Group, which had locations throughout the UK and Europe. As a long-time client of HSBC, Regenersis introduced CTDI to the bank. The relationship grew over time based on both the solutions HSBC could offer the company as well as the bank’s global reach.

The Business ChallengeWhen CTDI acquired Regenersis, there were several different accounts located in eight different countries. According to Marcus Lemke, Treasurer for CTDI EUROPE, each country had their own treasury function with cash and FX being managed in a completely decentralized way. “We wanted to make our treasury more efficient across the entire organisation,” explains Mr Lemke. “We were looking for a way to introduce a cash pool so that we could centralise management of liquidity and FX from the head office, funding sub-accounts only as needed.”

The SolutionWhile they did consider other banks, Mr Lemke says they settled on HSBC primarily because they were the only one who was already in all the countries where CTDI EUROPE is. “This gave us the advantage of being able to implement a liquidity solution process with one single bank.”

After gaining a full understanding of their business operations and needs, HSBC designed a complex Pan-European solution that concentrated the company’s USD, EUR and GBP into

individual currency header accounts. Sub-accounts were allowed to make payments throughout the day without worrying about being overdrawn, knowing that accounts would be brought to a zero balance at the end of each day. Since the cash concentration also resulted in inter-company loan positions, HSBC set up inter-company loan reporting on HSBCnet – the bank’s online banking and account management system – so CTDI EUROPE could view and manage these positions as well.

Although this was the original solution, Mr Lemke says several adjustments were necessary due to changes in their business operations as the merger of CTDI and Regenersis moved forward. “For instance, the pool was initially going to come into the UK, but we ultimately decided to move the Treasury to Germany. HSBC was able to adapt quickly and fine-tune the solution to accommodate our needs.”

ImplementationThe implementation was steered by HSBC in the UK and required a number of teams from across the bank to work closely together. This included a relationship team and in-country implementation teams as well as in-country Global Cash Management and Liquidity teams. The entire process was overseen by a Project Manager, who acted as a single point-of-contact for CTDI, and a Senior Cash Management Consultant, who also worked closely with the company and liaised with the various internal HSBC teams.

“During the main phase of the cash pool implementation, we were in daily contact with our Project Manager,” says Mr Lemke. They also had weekly meetings with the Project Manager and Senior Cash Management Consultant, during which they were updated on where the implementation was in the process and received reports on resolutions to any issues. “Having one person to turn to was key for us,” he continues. “If there was an issue in one country – we didn’t have to figure out who the right person was to talk to – we already knew.” This was especially important, he adds, as he got busier with the Regenersis merger and couldn’t devote a lot of time and attention to the implementation. “HSBC understood, and

A global company in the communications industry, CTDI further strengthened its presence in Europe with the acquisition of the former Regenersis Group. As part of the merger process, the company was looking to centralise treasury operations to create more efficient liquidity management. With a long-standing relationship already in place between Regenersis Group and HSBC combined with a global footprint that matched CTDI’s – the company turned to the bank for an innovative Pan-European cash pooling solution.

CTDI Simplifying liquidity management for greater efficiency and lower interest expenses

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kept the project moving forward all the time. We felt very well taken care of and were happy with the progress of the implementation.”

The ResultThe most significant result, Mr Lemke says, was putting a structure in place that gave them daily visibility of cash positions across various currencies and countries. “Everything appears on the cash pool master account, which we can see in HSBCnet.” The solution also helped them optimise their interest expense since they were able to use idle balances more effectively and rely less on credit lines.

Putting HSBCnet in place simplified CTDI’s payments processes companywide as well. “It is very useful to have one platform that can be used in all the countries where we

are located,” says Mr Lemke. “Everybody has access to it so payments can be added locally and then be authorised locally as well as at headquarters.” The reporting tool in HSBCnet also provides fast, easy access to the group’s liquidity and account balances.

“Our goal of more effective liquidity management was achieved 100%,” Mr Lemke concludes. “Implementation was easy and seamless, and HSBC was a professional partner with a deep knowledge not only of our business but also the countries in which we work.”

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Published: October 2018 For Professional clients and Eligible Counterparties only. All information is subject to local regulations. Issued by HSBC Bank plc. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England No 14259 | Registered Office: 8 Canada Square London E14 5HQ United Kingdom | Member HSBC Group