Close Brothers Asset Finance Restructures and refinancing. James Waterson 19 th February 2013

Transcription

1 Close Brothers Asset Finance Restructures and refinancing James Waterson 19 th February 2013

2 Close Brothers Asset Finance Part of Close Brothers Group plc - FTSE 250 listed - Employ in excess of 400 staff - Nationwide coverage with geographic expertise and sensitivity - Expertise gained over more than 20 years - Motivated to develop long standing relationships with business advisers and their clients - Various and distinct routes to market, both direct and via partner programs Strictly confidential 2

3 Our attendance today Committed to supporting business in Scotland with 100m+ new lend objective Work alongside new and existing credible partners Responsible funder of SME to Mid-Corporate business, with no specific sector focus Will fund various aspects of distressed debt opportunities via asset leverage, funding restructures, shareholder / management buy-outs and buy-ins, equity release for pre-packs & acquisitions Ability and appetite to fund opportunity when other funders will not Sale & HP back Specialist asset and sector knowledge a breadth of experience and insight within the business, delivering results for our advisers and the borrower Transactional nature of the business allows for focussed delivery and execution Strictly confidential 3

4 How we work Assess each opportunity on its own merits no one deal is the same Ability to mobilise and react promptly to opportunity with short and quick lines of sanctioning authority often time is key! We endeavour to keep life simple with a well established understanding of the assets, their value to the business, performance and value in the secondary market. Close Brothers have defined routes to market and exit plans if required, which instils confidence in the proposal under consideration. Security is structured accordingly. Appropriate risk & reward treating customers fairly Motivated to support business in Scotland we are only as good as our last deal Strictly confidential 4

5 Case studies

6 Food and drink 1. Company: Produce fresh food to the supermarkets and other small retailers as well as their own retail operation. The company employs 100+ across the central belt and via several retail outlets in Scotland 2. Challenge: The company was bought out of administration by the new management team who have a a background of dealing with the multi-national retailers. Funding for the acquisition was sought via a London VC, management equity and debt via Close Bros to repay another funder who required Market Value for the goods. 3. Solution: Close Bros quickly appraised the asset register and contacted the other funder, Barclays, regarding an invoice. At the same time we were asked to fund some additional capex and the Sale & HP Back loan documentation was signed. 4. How did this help the business: The newco business has a partner funder who can take a flexible view of the opportunity, buy-in to management and their ability to deliver on the business plan and have an appetite to continue to fund investment, where the business case and rational will support it. Close Bros remain asset focussed and not sector driven Strictly confidential 6

7 Manufacturing 1. Company: An established manufacturing business in Glasgow with a strong reputation and few competitors in Scotland. The Company had a reasonably strong customer base, although 60% of the company s turnover derived from 4 key customers, the largest of which accounted for 27% of turnover. 2. Challenge: In recent years the Company suffered from rising raw material and distribution costs, not passed on to the end customer + they suffered a significant bad debt in the 2011 hitting profitability and cash flow. The Directors took the decision to appoint Administrators. 3. Solution: The Company had a number of plant and machinery items on HP Finance with various funders and with some residual value. Close Bros Asset Finance worked off a desktop valuation and trade values to ascertain how it could fund the company through a shareholder buy-out and out of administration this was achieved by way of an equity release and sale & HP back 4. How did this help the business: the business continues to trade, albeit with a number of challenges in the immediate future, employs 20+, provides a niche product to the food & drink sector which remains in demand and upon some preferential creditors being paid, will be in a strong position to realise opportunity and income. Strictly confidential 7

8 Working in partnership Close Brothers Invoice Finance Variety of other partner businesses within our division Close Brothers Invoice Finance Providing factoring and invoice discounting for SMEs Lending based on value of outstanding invoices Supports cash flow, MBOs, acquisitions Strictly confidential 8

9 How it works Close Brothers Invoice Finance You raise an invoice The same day, we pay you up to 95% of the value, giving you instant access to the money your customer owes you 2 options for credit control o You maintain your own (Invoice Discounting) Or o We take care of sales ledger management, credit control and collections (Factoring) Strictly confidential 9

10 Benefits Close Brothers Invoice Finance Peace of mind obtain immediate cash on delivery from your sales Save time no need to produce invoice listings or undertake monthly reconciliations More confidence negotiate more attractive supplier discounts (Invoice Discounting) Full control you manage your sales ledger and customer relationships Strictly confidential 10

11 Thank you Q&A