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One of the opportunities East-West Debt can offer its clients having claims on emerging markets, is a sale by the client of its claim to East-West Debt.
As one of the few in the market, East-West Debt has the capability of establishing the real value of an outstanding debt. Its excellent reputation in the market guarantees that East-west Debt will pay the client a fair price for its debt.
The height of the price depends of course also on the way of proceeding and the wishes of the client.
SHORT TERM PURCHASE
When a client decides that he is willing to sell his claim, East-West Debt offers various possibilities. One of them is that East-West Debt buys the claim on an emering market itself. The solution is to the benefit of the client if he is urgently in need of quick cash money.
The procedure is quite simple and straightforward. The client provides East-West Debt with the necessary documentation of the claim and after a thorough investigation, East-West Debt decides whether it wants to buy the claim in question on a particular emerging market country.
In case East-West Debt decides it has an interest in the claim, the company makes a proposal to its client whereby the price is based on the applicable market price. It is then up to the client to decide in all liberty whether he wants to sell his claim to East-West Debt.
East-West Debt guarantees that it lives up to the highest standards of confidentiality and discretion, whether or not the client eventually decides to sell the claim or not.
The obvious advantage of this possibility for our client is to get the money quickly.
PURCHASE IN OPTION
Not always, a client is satisfied to sell his claim at the applicable market price and he wants to make a higher percentage out of the recovery of his claim. It is a well established fact that claims on emerging markets are very low rated in the secondary market. In that case, East-West Debt and the client can agree to conclude an option agreement.
In such an option agreement, East-West Debt and the client convene a certain percentage to buy the claim and agree that East-West Debt will have the exclusive right to buy the claim before a certain date. In annex to this option, the client grants East-West Debt a power of attorney to negotiate the claim and to represent the client for the agreed time.
During the validity of the option, East-West Debt will explore then the possibilities to recover the claim at the percentage the client wants. If East-West Debt succeeds to find such a solution, it lifts the option and takes the risk to buy the claim at the percentage agreed with the client.
In case East-West Debt is not able to find a solution at the agreed percentage, the option will not be lifted and the claim returns to the client who is free to explore other possibilities.
The advantages of such an option agreement are :
-The client remains the owner of the claim during the term of the option;
- The client will get a higher percentage than in case of selling the claim directly to East-West Debt;
- The client has no responsibility for the claim anymore towards any third party from the moment East-West Debt has bought the claim. This is the big difference compared to working under a negotiation mandate.
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