Project Linen
- The Company was one of the UK’s largest distributors of fabric and curtain material. The Company had been spun out of a larger Group and, following the de-merger, was left in financial difficulties. It also lacked sufficient senior management resource. The Company was facing insolvency.
- The Company’s Lenders had received advice from their professional advisors that indicated that any returns to the secured lender would be minimal in the event of failure. The Lenders were not prepared to inject further funding into the Company. Hilco reviewed the business and ascertained that if insolvency was avoided through a solvent restructuring of the Company there was real potential to maximise returns. Accordingly, Hilco acquired a substantial element of the secured Lenders' bank debt, giving a return to the Lenders. Hilco also agreed with the Lenders to share the potential upside if the restructuring was successful and advanced new funds to the Company.
- Our team assisted management in developing and implementing a consensual restructuring plan. Our team got directly involved in detailed negotiations with the Company’s suppliers to affect a balance sheet restructuring. At an operational level a strategy was implemented to improve profitability and cash generation. A full systems review was initiated and significant changes were implemented.