Sonepar and RBS Complete RMB Cross-border Cash Pooling

Sonepar, an independent family-owned distributor of electrical products, has become the first French company to implement two-way renminbi (RMB) cross-border cash pooling in the Shanghai Free Trade Zone (FTZ).

The Royal Bank of Scotland (RBS) recently launched the service for multinational companies (MNCs) registered in the Shanghai FTZ. The bank said that RMB cross-border cash pooling is an extension of the service itprovides to Sonepar’s regional treasury centre in Hong Kong, supporting their operations in nine markets across Asia.

Sonepar, which was founded in 1969 and employs 36,000 associates at 190 entities in 38 countries, has identified Asia is a key growth driver for the group with China contributing the largest share. The company posted sales of €16.3bn in 2013.

“We are excited to be the first French company to have the ability to conduct two-way cross-border RMB sweeping through our subsidiary in the FTZ,” said Matthieu Raffestin, senior vice president of finance, Sonepar Asia-Pacific.

“The RBS facility means our regional treasury centre in Hong Kong is able to integrate with our China entities’ onshore RMB cash pools. This not only brings greater transparency to our operations in the mainland, but equally important is that it enables us to deploy RMB liquidity between our onshore and offshore affiliates effectively.

“With liquidity management being more important than ever, especially for a company with a global reach like ours, we were looking for solutions that would not only improve our performance in Asia, but also act as the springboard for our expansion plans in the region.”

The new solution follows the Chinese government’s continued efforts to promote RMB internationalisation. After Chinese president Xi Jinping’s visit to France in March, the two countries pledged to boost cooperation in developing the offshore RMB business in Paris. The Chinese government also granted France an RMB80bn investment quota through the RMB Qualified Foreign Institutional Investor (QFII) programme.

Recently, the People’s Bank of China (PBoC) also announced that it will allow special accounts that facilitate fund transfers to and from overseas accounts to be created in the Shanghai FTZ, yet another move by the central bank to further relax the regulations on the use of RMB for international transactions.

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