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Distribution company in the food services industry

CHALLENGE

Although the client’s current operation was profitable and had a positive cash flow; the company have significant amount of debt maturing within a year. At the same time, the client requires a significant amount of liquidity to sustain and expand operations.

ACTION & SOLUTION

We reviewed their financial statements, available assets and existing banking facilities. As a result of our analysis, we uncovered that the client (i) is not able to fully leverage the property’s new valuation to extract liquidity; (ii) face challenges in optimally using their banking and financing facilities (e.g. their supplier needed SGD 1.0m Bank Guarantee but its current bankers only offer a ~ SGD 200-300k facility per bank and (iii) unable to find suitable receivables financing (e.g. : Insurers and existing financing service providers only offer solutions for select buyer groups)

Client engaged CCRManager as an advisor and inhouse CFO / Treasurer to rationalize balance sheet, develop and execute financing solutions. We provided a comprehensive financial plan that would support the business sustainably covering the following:

◦Renegotiate with existing banker and engage new financiers for the property

◦Develop a portfolio solution using insurance (and whole turnover receivables financing) to finance the growing pool of receivables

◦Structure for a fronting bank on the bank Guarantee, with risk participation from the other BG bank providers

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