Classys Expects Strengthened Cash Flow Through Securitization of Brazilian Accounts Receivable

Classys plans to improve its operating cash flow by securitizing accounts receivable.

On the 23rd, Classys announced that it will securitize accounts receivable from its local client Medsystems in collaboration with Santander Bank. The company will sell the accounts receivable received from Medsystems, as well as future accounts receivable, to Santander Bank and collect the proceeds in cash. The cash collection is expected to take place during the third quarter of this year and will be reflected in the financial statements disclosed at the end of September.

Classys’ sales increased by 79% over three years, from 100.6 billion KRW in 2021 to 180.1 billion KRW in 2023. Accordingly, accounts receivable have also increased. Although the collection of accounts receivable has been stable and timely according to payment terms, the company explained that through this securitization, cash will be collected immediately upon sales occurrence, thereby improving financial flow.

Santander Bank holds a leading position in the Latin American market. With over 30 years of experience, it is a financial institution cooperating with more than 400,000 clients across over 50 countries.

By selling the accounts receivable to Santander Bank on a non-recourse basis, the company transferred the risk to the bank and thus eliminated the risk of uncollected accounts receivable. The discount rate required for the sale of accounts receivable will also be borne by the client, maintaining profitability.

A Classys representative stated, “Through this Brazilian accounts receivable securitization, we have reduced working capital and improved operating cash flow. Based on this, we expect to actively expand our business areas following the merger with Iroda.”