Case Study
Project Vanilla
March 2014- Type of Case :
- M&A Advisory and Fund Raising
- Title :
- Project Vanilla
- Status :
- Closed March 2014
- Value :
- USD 31.5 million
PROJECT OVERVIEW
- Our Client, a producer of natural ingredient products (the “Company”) had refinanced defaulted debts of USD 15.5 million due to a state-owned bank with a Hong Kong based special situations fund. The Company found itself in a high growth market and required additional USD 16 million to finance necessary capital expenditures, working capital and settlement of third party loans.
- Our objective was twofold. First, to assist the Company to get back into Indonesia banking system (as previously they were in default status) by refinancing the debts due to the special situations fund and by raising additional investment and working capital. Second, to help improve the capital structure of the Company by bringing in a new investor.
PROJECT ISSUES
- The funds provided by the Hong Kong special situations fund were not only expensive, but also carried with them onerous covenants and security charges. The only way for the Company to raise new bank funding for growth would be to pay them off.
- As the Company had previously defaulted on bank loans issued by Indonesian licensed bank, they had been effectively locked out of the domestic bank market for at least 12 months.
WHAT WE DID
- Assisted in the development and evaluation of the funding, debt settlement and overall value capture strategy.
- Assisted the Company in negotiating and obtaining the necessary funding from private equity investors with the appetite and capability to support the growth of the Company.
- Advised on the key commercial terms and structuring of the bank refinancing and its execution, in particular ensuring that there was a fit with the private equity investor’s buy in terms and conditions.
- Prepared and advised on the valuation of the Company through the various stages of the process.
- Managed and coordinated the due diligence conducted by the private equity investor and bank.
- Managed and coordinated the execution and closing of the funding by both the private equity investor and the bank.
PROJECT OUTCOME
- Successfully closed USD 15.5 million bank debt refinancing.
- Successfully closed USD 16 million investment by a private equity.