EUR 2.5m loan to a breakdown case, ending in bankruptcy
Background:
EUR 2.5m exposure towards a company working within the transportation of heavy material related to the construction industry and heavy material related to windmill industry
The activity within the windmill division had been under pressure for several years due to strong competition
Went from a turnover of EUR 8.9m and positive EBITDA in 2013 to EUR 5.1m in 2015, a loss of over 40% of revenue resulting in negative EBITDA in 2015
The situation at on-boarding in 2016:
The exposure was governed through an Inter-creditor Agreement (ICA) with other banks
On route for bankruptcy. Simultaneously discussions with three parties regarding the sale of the company
Security package consisted of 1 priority mortgages in the HQ, several separate mortgages in trucks, flatbeds and other operation material. In addition a joint mortgage in receivables, inventories, fixtures and goodwill. The joint mortgage serves as security for the parties to the ICA
The situation we were faced with:
An uncooperative owner who damaged business by antagonising customers
Severe liquidity constraints due to shrinking sales
Sale of the asset from the dismantled windmill division ongoing – proceeds to reduce banks’ exposure
Customers and suppliers were unhappy
Where Reviva added value:
Compelled CEO / owner to step down, ensured senior management to stay and put in a plan to incentivised them
Joint workout approach and close cooperation with other lenders and leasing providers, deciding on a wind-down of the windmill division and a sale of the remaining business
Worked closely with the liquidator on the quick sale of assets of the dismantled windmill division
Assessed bids for the business, negotiated with other creditors and stakeholders
Allowed a lease of the property (which was serving as collateral for the loan Reviva managed), together with a put option to the lessee after two years.
Outcome:
Recovery of (75%) achieved despite a bankruptcy and breakdown of the business