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CORPORATE RECOVERY
Flexible finance for turnarounds
The current market has seen an increase in the number of turnaround deals. Phil Woodward of
Leumi ABL asks, how should asset-based lenders respond to the opportunities presented by
these challenging times?
A
s a rule, backdrop and check that margins are interesting turnaround deals recently,
ABL providers sustainable, particularly when raw including the acquisition of the assets of
will operate materials are imported. Trimite by Weilburger Coatings UK in
a higher level of Cash headroom and collateral cover March. Founded in 1940, Trimite has
monitoring and control require special attention, as the grown to become the major supplier of
over their clients than management team may need additional industrial coatings in the UK with a
more traditional bank time or cash should the turnaround not turnover of £30 million.
finance providers and go exactly as planned. Leumi ABL provided a £7.5 million
are therefore better placed to react to Exit strategies should be examined funding line consisting of £6 million
the needs of a client in a turnaround at the time of entering the deal rather confidential invoice discounting (CID),
situation, be it providing more money than once it has gone wrong; this is £1.2 million stock and £300,000 plant
or supporting a restructure. particularly important in the present and machinery finance.
When assessing a turnaround deal all environment as inventory and plant
aspects of the plan should stack up. For and machinery values are variable For more information about ABL,
example, consider whether sales targets and uncontrollable. call Phil Woodward on 01273 716202
are realistic in light of the economic Leumi ABL has seen a number of or email pwoodward@leumiabl.co.uk
Turnaround from the inside
Turnaround is about taking a faltering
business, keeping it alive and making
it viable, writes Henry Fairpo, founder
of the Castaing Group
T
urnaround managers (TMs) take interim roles
inside a business, from strategic marketing
and procurement to acting CEO – it’s not
just about finance.
Trust is key. The TM’s toolkit starts with strong
experience and relationships, particularly with banks,
and balances finding cash now, connecting with
creditors and building for the longer term.
Without the emotional attachments that are often a
hurdle for incumbents, TMs can see issues clearly, build
and implement practical action plans then demonstrate
success to lock-in creditor support.
And we only succeed if the business succeeds. Paying
our fees is part of the plan but we are flexible using
milestones, performance bonuses and, potentially,
equity stakes as part of a package.
Being a TM isn’t about advising, it’s about
delivering. TMs are action focused, like surgeons
working against time to save the patient. Yes, we often
wield a scalpel but, while surgery is never pretty, the
recovery can be astounding.
Please contact us earlier rather than later, the more
time we have the more we can do.
32 Mergers & Acquisitions
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