Publications

$18 Million Refinancing With New Lender for Financially Distressed Company


$18 Million Refinancing With New Lender for Financially Distressed Company
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Overview:

An investment banking firm referred KGI to a rapidly growing consumer products company facing liquidity issues. Working closely with management, we built a business plan and financial projections that resulted in additional funding from the existing ABL lender, and closing a refinancing transaction with a new ABL lender at a higher credit limit. The company is continuing its growth in sales and profits.

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Situation:

  • A rapidly growing distributor ($125 million revenue) of consumer automobile products
  • A $12 million senior asset-based line of credit in default and blocked from additional borrowings
  • Key vendors threatening to limit or stop supply
  • Additional capital required to achieve the business plan

Solutions:

  • Developed weekly and monthly financial projections and key performance indicators
  • Identified cash flow and profitability improvements
  • Built credibility with the existing senior lender and key vendors
  • Developed a financing package and led communications with potential new lenders

Results:

  • Completed a credit agreement amendment with the existing senior lender, which increased the credit line limit by $4 million (from $12 million to $16 million) and extended the loan maturity by 6 months
  • Replaced the existing senior lender with a new asset-based lender at an $18 million credit limit
  • Helped the Company raise $1 million of new equity capital
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KGI welcomes the opportunity to discuss ways to navigate today's turbulent capital markets, close higher-risk financing transactions involving new loans, obtain additional borrowings on existing loans, and restructure existing loans.

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KGI has assisted both borrowers and lenders in completing hundreds of "higher-risk" financings for over 30 years. We helped resolve over 1,500 complex and urgent finance, profitability and cash flow issues.

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For more information contact:

Steve Green, Co-Founder & President: sgreen@kginc.com

KGI Advisors, Inc.


www.kginc.com
310-829-0255 ext 220

Whether a Company is struggling financially or on the cusp of breakthrough growth, KGI can help. Our seasoned experts work alongside management to solve complex cash flow issues, operational challenges and other business crises. If liquidity or sale is needed, KGI provides a powerful combination of services and expertise to achieve outcomes that cannot be duplicated by other standalone consulting firms.