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Refinancing of Construction Company
Situation:
The client, an asphalt and aggregates construction company, had been experiencing years of growth and profitability. Unseasonable cool and wet weather contributed to a year of losses which caused a default in the working capital line, which in turn triggered other defaults in the company’s loans.
The company had instituted numerous changes to its operations which were expected to return the company to profitability. Despite these efforts, the loan defaults were not expected to be cured for some time, as the company’s heavy equipment had been financed by short-term financing.
Task/Action:
LMG helped prepare a revised capital structure and bank financing to accommodate the seasonality of the business and the capital equipment requirements. This was incorporated into a business plan which was then presented to several lenders in a request for proposals.
Result:
Negotiations for new financing commenced as a result, with the client replacing credit facilities of over $10 million on favorable terms.
