Case Studies
Turnaround Case Study
The Problem
Countryliner Group Limited, a group of transport companies operating bus services for local authorities and leader in its sector in the South of England, was being squeezed by a lack of credit availability and increasing oil prices.
What Merchant Corporate Recovery PLC did for them
- The turnaround strategy included working capital and stake acquisition funding
- Merchant Corporate Recovery invested £200,000 for a 51% stake in a new investment company which has acquired 100% of the transport group
- Provided a working capital facility of up to £300,000
- In the first six months of 2009, group turnover was c£4.3m with pre-tax profits at c£250,000 and net current assets in excess of £1m.
- Since Merchant Corporate Recovery involvement, debts owed to third parties (in excess of £1m) have been written off, bank borrowings repaid and the group is now trading profitably.
top of pageTurnaround Case Study
The Problem
LM Logistics Limited ("LM"), a warehouse and transport group founded in 1973 and Syntex Logistics Limited ("Syntex"), a company specialising in container haulage had severe cashflow problems leading to difficulties in obtaining credit.
What Merchant Corporate Recovery PLC did for them
- Merchant Corporate Recovery invested £102,000 for a 51% stake in a new holding company.
- This new holding company then acquired 100% of both LM and Syntex.
- Merchant Corporate Recovery also provided a £398,000 loan facility to the new group.
- To secure the loan, Merchant Corporate Recovery secured this against a first charge over its otherwise unencumbered assets.
Turnaround Case Study
The Problem
A Hertfordshire-based haulage company was having cashflow problems and in arrears with PAYE and VAT, as well as coming under pressure from the bank.
What Primary Asset Finance did for them
- Implemented 'Prepack' – liquidating the company and starting again
- Addressed PAYE & VAT commitments
- Cleared bank debt and ensured directors personal guarantees were not called upon
- Freed up the second charge over the commercial site which was held by the bank's finance subsidiary
- Used this second charge more effectively for the company's new funding requirements
- Introduced a well known Invoice Discounter who refinanced the previous bank facility
- Refinanced the existing vehicle fleet
- Topped up some funds against the second charge, releasing enough funds to fund the new entity going forward saving the director's house and 60 jobs
Acquisition Case Study
The Problem
A coach operator was looking to buy a competitor based on the East Coast.
Total consideration £1.9m. £1.4m on completion. £500k deferred for three years.
What Primary Asset Finance did for them
- Refinanced the vehicle fleet raising £780k
- Released funds from the debtor book £220k
- Refinanced the existing, unencumbered, commercial site for £480k
- Plus £120k overdraft facility provided by Lloyds TSB
- Raised total £1.6m, giving £200k headroom from day one
Management Buy Out Case Study
The Problem
A Plant Hire business based in Bedfordshire, where the current Managing Director and minority shareholder were looking to buy out the 90% shareholder who wanted to retire.
Consideration £ 1.3m. £1.1m on completion - £200k deferred for two years.
What Primary Asset Finance did for them
- Raised £ 600k against the hire fleet
- Raised £ 350k against the commercial mortgage - (cleared off existing overdraft with bank)
- Raised £ 600k from debtor book
- Paid the £1.1m on completion - paid off the overdraft facility using longer term debt so as not to be a drain on cashflow
- Leaving £100k headroom day one
Refinance Case Study
The Problem
Large print business based in London with cashflow problems.
What Primary Asset Finance did for them
- Refinanced the existing presses, but negotiated a three month capital & interest holiday as well as seasonal payments to help through the quieter months
- £1m refinance, injecting much needed working capital, a three month breather and a more structured facility taking into account company's cashflow requirements
Refinance / Acquisition Case Study
The Problem
Primary Asset Finance was approached by a large invoice discounting company looking to fund a print company acquisition. The invoice discounter was able to release a certain amount of funds from the debtor book, but due to company policy were only able to advance 50% of the value of the machines. Unfortunately, this left a £200k shortfall and the deal was due to collapse.
What Primary Asset Finance did for them
Invoice discounter contacted Primary Asset Finance who have close contacts with a number of refinanciers and were able to arrange a facility advancing 120% of the equipment value, enabling the deal to work.
Both invoice discounter and client were delighted.
