Currently very low and sometimes even negative returns are making these challenging times for companies with excess cash. It is not easy for the treasurer to minimise cash drag. In this business case study, we discuss and present return objectives, liquidity requirements and restrictions. There are ample possibilities to put cash to work. But there are risks too. Put it on deposit with a bank? What about counterparty risk? Invest in a money market fund? What about investment risk? And engage in repos or repay debt early? Would a combination of all of these be sensible? There are a lot of choices to be made.
JDE Peet’s also struggled with these issues. We present the various solutions, JDE Peet’s choices and why it took the decisions that it made.
Speakers: Jan Schets, JDE Peet’s, and Peter Kool, BNP Paribas.