Credit Line Analysis

1. DESCRIPTION OF THE LOAN

SC DOSCO ROMANIA SRL applied for a line of credit of 500.000 EURO over a period of 12 months in 2010 at BRD GSG. This line of credit was used in order to make some investments in drilling equipment and to pay the suppliers.

At the beginning of the period they used 70.000 EURO to pay a foreign supplier for the rent of drilling equipment. Next, they used 80.000 EURO in order to purchase foreign equipment that was sold on the Romanian market. Furthermore, they used 100.000 EURO to pay other foreign suppliers.

After cashing in some invoices they repaid the bank 150.000 EURO. Moreover, they took again 100.000 EURO for suppliers as well. Before the 12 months term they gave back the 200.000 EURO that they owed to the bank.

The interest rate for the money withdrawn from the bank is ROBOR+2,5%.

The accepted value of the collateral is 550.000 EURO. The collateral is represented by the operational base of the company from Floresti, Prahova that consists of offices and workshops and terrain.

2. DESCRIPTION OF THE COMPANY

A. Company history

Dosco was founded in 1992 in Netherlands by a few Dutch associates who observed that the market of Oil, Gas and Mining was underserved and therefore they started an innovative business which delivered rental and sales services of equipment, drill stem components and handling tools. They registered a great success and soon transformed their local business into a multinational one, opening companies in Italy, Germany and Romania, all of them being limited liability companies.

Dosco Romania, the object of our study, is a limited liability company founded in 1997 by two Dutch businessmen in partnership with a Romanian one with the headquarters in Bucharest. Each of these three has an equal amount of the company’s shares.

B. Management structure

Dosco is a small company, consequently it has few employees. From this we can deduce that the span of control of the managers is rather low. There are only three levels in the organizational structure. The first level is represented by the CEO. The other managers are situated on the next level, namely the Operational Manager, the Sales Manager and the Economic and Financial one. The Operational Manager has the largest span of control. He supervises the employees that do not work at the office, but those who activate at the drills. The Sales Manager takes care about the Sales Department, but does not have any subordinate. Furthermore, the Economic and Financial Manager has in charge the Assistant Manager who takes care about the custom issues and the relationship with banks and all sort of partners, the three accountants and the two secretaries.

C. Description of the company’s activity

Dosco is a company which offers services to the firms that deal with the drilling of petrol and gas wells. It is a sort of agent between those who need drilling equipment and those who own it. The clients state their demand for equipment and Dosco, which has contracts with firms all over the world, gets the necessary tools and rents or sales them to the clients in exchange of really large amounts of money. In order to be able to deliver the equipment, Dosco needs to carry it from one place to another and they decided to outsource this activity, concluding contracts with companies that know more about this domain. What makes this company different from the others providing the same services is the fact that, besides selling and renting equipment for petrol and gas wells, they also offer special tools for the firms who activate in other fields where drill is needed (an example of this would be the organizations which drill in salt mines).