Case Study #1 Distressed Credit Workout
Acceleration and foreclosure can be avoided through transparency and credibility.
Situation
A leveraged technology company with shrinking operating margins was under pressure to liquidate portions of it’s business to satisfy secured ABL creditor demands.
Action
1. Revised operating targets were developed to reduce OPEX.
2. A third party boutique work-out firm was engaged to examine and validate the revised plans to bolster management credibility.
3. Near term operating performance met the updated targets.
Result
Management gained sufficient bank group confidence to achieve agreement on a new set of waivers and loan payment targets. During the resulting breathing space the agreed upon time table provided, a new investor was identified, which enabled replacement of the commercial bank group, and allowed the company to continue operations.
Case Study #2 New Loan Facility
A rapidly expanding firm bolstered it’s growth prospects by establishing a loan facility.
Situation
A well capitalized life science firm sought to fund factory construction and preserve balance sheet cash.
Action
1. A financial package was prepared, configured to provide all pertinent lender underwriting data, including future business plan and past performance information.
2. Multiple competitive bank proposals were solicited.
3. Negotiations were conducted with several interested parties.
Result
A three year bank facility was established at a borrowing spread 1.50% below similar structures and offerings, with no performance covenants, other than minimum cash.