Securing liquidity and lines of finance in times of growth

Banner Cases 2v4- mod

Company profile and market:

Company in the manufacturing sector of chemical components for the agri-food industry. Company with a turnover of less than €500 Mn, and less than 2,000 employees.

The company belongs to the value chain of the agri-food industry.

In 2018, the sector was facing difficulties due to a historic drop in the prices of agri-food products due to the high productivity of previous years' harvests. This caused all companies in the sector to suffer margin reductions.

Company needs:

In this environment, the company needed to improve margins and allocate increased production to higher value-added products, increase diversification of its markets, and achieve cost normalisation.

The company implemented a global strategy (structural, commercial and financial) for this, but it was subject to syndicated bank financing and found it difficult to obtain the new working capital financing required by the internationalisation strategy and higher-margin production portfolio in a short period of time.

The Finalbion Proposal:

Due to the restrictions of the new indebtedness that the company presented as a result of the syndicated loan, our entity proposed a factoring line, perfectly compatible with its bank financing, as it was without recourse to the assigning company. In addition, it did not reduce the debt capacity of the authorised debtors as it is a financing that does not have an impact on CIRBE.

With this proposal, the company was thus able to finance a volume of just over EUR 72 million of customer invoices with us and to start implementing its new business plans during the period of negotiation of a new bank financing structure suited to its new market situation.