How GLACEX Works
GLACEX has one simple rule: Information provided must be genuine and accurate.
GLACEX is an exchange, providing an efficient, well regulated marketplace for its members. Each transaction GLACEX facilitates is specific and unique, and is governed by legally binding contracts to protect the interests of all parties.
GLACEX Professional Investors are drawn from organisations such as venture capital companies, private equity companies, and banks, as well as HNW family offices. Before being admitted as GLACEX members, investors must prove their status as professional, sophisticated investors, which will be fully validated and verified by GLACEX's legal advisors.
Please click here to view further information on our principles).
Project De-Risking Models
BAV has an obligation to investors to de-risk projects as far as possible, and to do this we require financial securities and comprehensive insurance wraps. We have two standard securities models.
Bank Guarantee Block Model A bank guarantee (BG) is a paper instrument issued by a counter party’s local bank via its correspondent international bank. It has standard terms and conditions, is backed by cash not shares, and typically has a one year maturation date.
BAV sets up a special purpose vehicle (SPV) for the project, and the counter party issues a BG for an agreed amount to the SPV’s bank account. Receipt of the BG triggers the conditional binding term sheet to become a binding term sheet, and BAV then converts investor pledges into liquid investments into the SPV account. BAV will return the BG to the counter party at an agreed date, not to exceed the maturation date.
If the counter party breaches the contract, a court can instruct the international bank to deduct penalties from the BG. This avoids lengthy legal proceedings. The international bank pays the SPV, and will reclaim the amount from the local bank (and in turn from the counter party’s account).
Cash Seed Block Model
The counter party deposits an agreed amount in an account held with a high rated bank such as HSBC or Citibank. The account must have at least two signatories, one representing the counter party and the other representing BAV, and both signatures are required to move funds. A bank agreement specifies circumstances under which the BAV signatory can be removed and funds returned to the counter party.
When the bank issues a letter confirming the both signatories and that the funds are available, the conditional binding term sheet becomes binding. BAV leverages the funds to acquire a higher value financial security to act as investors’ international collateral. BAV then purchases a customised insurance wrap, removes its signatory from the account, and the cash is returned to the counter party. BAV converts investor pledges into liquid investments into the SPV account.
If the counter party breaches the contract and incurs financial penalties, BAV will claim on its insurance policies.