A syndicate of banks and insurers had participated in an unsecured facility to a clothing and textiles manufacturer.
The manufacturer was unfamiliar with international debt markets, and did not appreciate the process of dealing with poor operating performance. It had experienced some issues with its operating performance and unsold stock due to unseasonal weather.
Mike noticed upon review of the quarterly reporting made by the manufacturer that it was suffering from a liquidity crunch. He engaged with it to understand the cause of crunch and was advised of the impact the unseasonal weather had had on customer purchases as well as the manufacturing problems. He then immediately informed the syndicate of the concerns, whereupon he renegotiated the terms and conditions to accelerate repayment of the facility.
The successful renegotiation of the unsecured facility avoided the declaration of a default by the manufacturer, yet allowed full and final repayment of the syndicated facility without any write-off required.
Case Study: Mike Fletcher (Click here to see Mike profile)