Case Study 6 – Debt restructuring & raising working capital for distressed company

Summary:

  • Distressed company needed to restructure existing finance and arrange funds for future growth
  • PAF approached lenders that could clear the indebtedness to the existing bank and raising additional working capital
  • PAF successfully arranged a £5.2m Invoice Finance facility and £2.8m of working capital facilities to manage the debt and facilitate future growth

Details:

A well-known supplier of high quality fruit and vegetables, with turnover of over £30m, was facing issues with it’s bank.  They approached us Primary Asset Finance with a view to restructure their finance and arrange funds for potential expansion.

The company had HMRC arrears, with which their bank were uncomfortable, as well as insufficient working capital.  Their bank had also leant them money on a short-term basis, a debt that the company couldn’t adequately service over a short period.  Whilst they received an equity investment to inject some working capital, the company was still in need of financial support.

Primary Asset Finance learnt about the details of the company and approached our network of funders, with the aim of clearing indebtedness to the existing bank and raising additional working capital.  We successfully arranged a £5.2m Invoice Finance facility, as well as £2.8m of additional working capital facilities, which was borrowed over a longer term and with an initial interest-only period.  Together, these facilities made the debt manageable and facilitated future growth for the company.