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Distressed Workout Solutions

Over the years we have successfully facilitated in many Property Development Projects, the following are a small selection for your review:

 

Distressed Workout Solutions

Our client was one of Australia’s largest fruit growers. They had embarked on a property acquisition and expansion program which had resulted in a working capital shortage and ultimately, following a reduction in the value of their overall property holdings, their Bank placed them in default and sent the receivers in.

After selling a small portion of the land holdings and paying down debt the clients sought assistance to refinance the debt and take back control of the farm. Mainstream lenders were not prepared to assist until a solid trading history had been established and so in the meantime it was necessary to arrange a specialised lending solution.

Solution

GCC introduced a specialist lender who negotiated with the Bank/receiver to acquire the mortgage.

The receiver was retired, and clients regained control of the farm.

Facility:$7,500,000
LVR:50%

 

Distressed Workout Solutions

Our client owns a mixed use/commercial property in a Sydney metropolitan location with an existing facility of $15.0M.

A recent updated valuation of the property revealed that a 65% LVR covenant had been breached and a capital reduction of $2.5M was required to rectify the non-monetary default.

At the time and subsequently, this reduction was not possible and notwithstanding that all interest payments had been made without fail, the borrower was placed in Receivership by the lender.

It became an urgent requirement to pay back the lender, retire the receiver and in turn control of the asset could return to the owner.

Solution

The Receivership made it impossible to secure funding from a main stream lender and through a private lender, GCC facilitated an approval for a Senior Debt of $10.0M (LVR at 60%) and a second ranking Mezzanine facility of $5.5M. The intention is that the facility will be refinanced to more traditional lender once 12 months full trading figures can be produced.

 

Senior Debt Facility:$10,000,000
LVR:60%
Rate:8.65%
Mezzanine Facility:$5,500,000
LVR:75%
Rate:15.00%

 

Distressed Workout Solutions

Our clients operated a wholesale and retail business in West Australia. A relocation of their business operations coupled with gearing their business activities for a major contract that did not eventuate placed a strain on their cash flow.

Clients embarked on an asset sale and although they substantially reduced their debt position it was not deemed sufficient enough by their Bankers. At the same time their trade creditors began to take legal action and the tax office issued notices.

Solution

Global Capital was able to secure funding to payout an outstanding mortgage, pay creditors and provide a level of working capital.

Facility:$2,500,000
LVR:60%

 

Distressed Workout Solutions

Our client approached us with an urgent refinance and equity release request. Their existing bank changed their relationship manager and the bank was unwilling to support them with an overdraft facility which they needed in order to import stock for continued business growth.

Their financials showed that they were profitable however they were experiencing acute cash flow problems due to the bank not supporting them through their growth phase.

Their cash flow problems had led to missed repayments, a small tax debt and other credit problems.

To exacerbate the situation the bank decided that they no longer wanted the clients business and requested that they refinance.

Our clients had 3 properties as security with a total value of just over $4M, roughly $1M in plant and equipment and also had rolling receivables averaging at $150k.

Solution

Upon review it was clear to us that the business was profitable however needed short term support. We supplied:

  • Refinanced to a private lender at a higher LVR than existing facilities
  • One of the properties was non core, we advised to sell which would instantly reduce debt levels and increase available equity and profitability
  • Sale and leaseback facility for acceptable plant and equipment assets
  • Cash flow facility is linked to sales so the facility could increase as sales increase and thereby fund future growth