Merger of State Exporting Companies – E24

The Norwegian export and business policy instruments are a large system consisting of several state actors that will help Norwegian companies, be it in terms of innovation, growth, financing or guarantees.

After the major review of policy instruments was completed towards the end of 2019, Trade and Industry Minister Iselin Nybø (V) arrives with news:

Export Credit Norway and the Export Credit Guarantee Institute (GIEK) will merge, provided the Storting agrees.

Employees were briefed at general meetings Wednesday morning.

– This is quite a big and important movement, which I think is desirable. This will help make it easier for users of Norwegian loan and guarantee schemes, Trade and Industry Minister Iselin Nybø tells E24.

She says the goal of the merger is twofold. The main point is that it will benefit exporting companies and users.

– Second, we must constantly observe our own use of resources. We must work as efficiently as possible and when these two actors work so closely together from before, it is not strange to merge them, says Nybø.

– There are two professional environments that will be merged here. Will this also be a reduction in staff?

– This is a business transfer, so basically all employees will continue. These are really good people, but even if the starting point is that everyone is involved, it will be natural for the new management to see how they want to organize themselves, Nybø says.

Government billions in circulation

Export credit currently lends money to finance exports.

These are basically loans granted to foreign clients by Norwegian export companies. Furthermore, the loans are granted when the products are to be used on the Norwegian shelf and for ships to be used in Norwegian waters under a newer scheme.

Giek, on the other hand, operates with guarantees.

They guarantee both the loans granted by the Export Credit and commercial banks, as well as the bank loans granted to exporting companies for investments in their own business. The guarantees allow to obtain an interest rate much lower than the one that would be obtained without the guarantee of the Norwegian state.

Giek has played a central role during the corona pandemic. When the government launched $ 50 billion government loan guarantees to small and medium-sized businesses as a crisis measure, it was Giek who would provide the guarantees. In addition, Giek received a budget of 20 billion to operate with credit insurance.

By the end of 2019, Giek had provided guarantees totaling NOK 82 billion, while Eksportkreditt had outstanding loans of NOK 65 billion.

Just over 70 percent of Eksportkreditt’s loans are guaranteed by Giek, the rest from commercial banks.

– Although they work closely together, they are also two organizations that work in different ways and have different cultures. Have you thought about how to implement this in practice?

– If we have. Giek is an agency and Eksportkreditt is a company. There are two different organizations with their cultures, but there are very good people who have the drive to develop more for the better for the users, Nybø says.

Alert various changes

News of the Giek and Eksportkreditt merger comes just before the government presents the export action plan. The exact date has not been set, but it is expected to be related to the state budget in October.

– We are now working on the export action plan where the government will propose measures that will contribute to better policy instruments to help companies with internationalization, says Nybø.

The Minister of Commerce and Industry also controls the rest of the great political apparatus, which also includes Siva and Innovation Norway.

– Is today’s news a sign that there will be more changes?

– There will be changes in the way we work with exports, but not everything is ready in this process, says Nybø.

– So you want to see Innovation Norway and the other parts of the apparatus at work?

– It is natural to look at this in relation to the export action plan, says Nybø and continues:

– What we are talking about today are two highly specialized parts of the export apparatus. Innovation Norway is also a major player in exports, so of course they are part of what we are seeing.

Receive compliments

– I’m very positive about this. I think we can get a very powerful unit for the export-oriented industry, both in terms of the companies here at home and the customers there, says Otto Søberg, CEO of Eksportkreditt to E24.

He has long been involved in the discussion about what can be done to boost Norwegian exports, and especially outside of oil and gas, as Norway becomes less dependent on oil in the coming decades.

Giek’s boss is also pleased with the decision:

– It is gratifying that GIEK and Eksportkreditt are merging, something that both we and the business community have defended, says Wenche Nistad, CEO of Giek, in a statement to E24.

She notes that Giek and Eksportkreditt have worked closely together from before and that they look forward to working more closely together.

– A GIEK-Eksportkreditt merger will make our services more user-friendly and powerful for businesses. In a challenging national and global economic situation, this is especially important, says Nistad.

Søberg is one of those who have long warned that Norway has, over time, lost market share globally and that our exports must grow if we are to maintain a successful business life and well-being like today.

He himself has extensive experience in Norwegian and international business. He believes that the action he is taking now can ensure that he gets a better following of the companies that use the services.

– Bringing the best out of these two cultures and achieving a forward-thinking, market-oriented organization will create a better foundation for the export industry than we can have today, says Søberg.

Much work left

However, the actual merger of the two companies has not happened overnight.

The Minister of Commerce and Industry has set a deadline of July 1, 2021 for the merger to be completed.

In the meantime, a lot of work has to be done and some legal things have to be implemented.

The Ministry states that it has received a confirmation from the EFTA Surveillance Authority, ESA, that “the merger does not change its assessment that the market loan offer does not include state aid.”

Until further notice, a board has been appointed to prepare for the merger. Consists in:

• Chairman of the Board Morten Støver
• More Bugge Fougner
• Siri Hatlen
• Karin Bing Orgland
• John G. Bernander
• In addition, Giek and Eksportkreditt will each have a representative on the board.

It is not yet clear who will lead the new export finance company.

– Do you want to take over and lead this new company?

– I will apply for the job if it is advertised, says Søberg in Eksportkreditt.