J.P. Morgan Launches Escrow Risk Mitigation Service in South Africa
Johannesburg, 7 June, 2012 - J.P. Morgan Treasury Services today announced new escrow services in South Africa to help clients mitigate counter-party risk. Already a leading escrow provider in the United States and Europe, J.P. Morgan will now provide escrow services in South Africa, under local law, in South African Rand and major foreign currencies. Escrow services assist clients to mitigate risk in relation to mergers and acquisitions (M&A), trade finance, project and construction finance transactions, and litigation.
The firm is currently extending its footprint in the Sub-Saharan Africa region, having recently expanded its office in Nigeria and in the process of setting up new representative offices in Ghana and Kenya.
"We estimate that more than 80% of J.P. Morgan's top 100 global multi-national clients are doing business in Sub-Saharan Africa, with their presence on the continent set to grow steadily over the next 20 years," said Chris Martin, head of J.P. Morgan Treasury and Securities Services in Sub-Saharan Africa. "The launch of escrow services therefore demonstrates another step in our ongoing commitment to expand J.P. Morgan's international banking capabilities by addressing the ever more global nature of our clients in the markets that matter to them the most."
"In the current global economic environment, setting up an escrow with J.P. Morgan enables clients to mitigate risk throughout the transaction life cycle and safeguards their designated assets when performing strategic transactions," said Faisal Ansari, head of J.P. Morgan's international escrow business. "J.P. Morgan's balance sheet strength, integrated global treasury management offering, and dedicated escrow team, combined with a strong local market presence in South Africa, enables us to service clients' local and cross-border transaction needs."
About J.P. Morgan Escrow Services
J.P. Morgan, one of the world's leading providers of escrow services, acts as a neutral third party to hold assets in escrow until an obligation is met or a commitment fulfilled. We offer a wide range of escrow solutions, and provide quick turnaround on establishing escrow agreements enabling clients to close deals without delay. Our escrow experts around the globe know the world's markets and regulations and will work with you to create the escrow structure that is right for your transaction. The following are some examples of how escrow solutions mitigate transaction or counterparty risk:
M&A
A percentage of the purchase price is held in escrow for a period of time to ensure compliance with representations and warranties or performance of covenants.
Capital Raising
Funds are held pending a successful capital call or other form of capital raising and not disbursed until all investors participate in the transaction. This is particularly applicable with private equity funds, hedge funds and venture capital funds.
Construction / Project Finance
Funds are held until completion of pre-defined construction milestones thereby protecting the investor or sponsor of a construction project.
Litigation
Funds deposited in escrow pending appeal of a court judgment, distributions to class-action claim holders, or bankruptcy claim processing.
About J.P. Morgan Treasury Services
J.P. Morgan's Treasury Services business is a full-service provider of innovative cash management, trade, liquidity and escrow services -- specifically developed to meet the challenges treasury professionals face today. More than 135,000 corporations, financial institutions, governments and municipalities in over 180 countries and territories entrust their business to J.P. Morgan. J.P. Morgan Treasury Services is one of the world's largest providers of treasury management services and a division of JPMorgan Chase Bank, N.A., member FDIC. More information can be found at www.jpmorgan.com/ts.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
JPMorgan Chase Bank N.A., Johannesburg Branch is an Authorised Financial Services Provider.