Working Capital Financing

Background

A family-owned Turkish agribusiness relied on expensive short-term local financing to leverage $5 million in own-capital against export sales of $175 million. They desired additional working capital on improved terms.

Actions Taken

The Project Capital+ team undertook a careful analysis of the cost of funds, stability of financing lines and options available, as well as the company’s supplier and customer relationships and how those assets could be used to support a facility.

The team recommended a strategy centered on using the company’s significant level of export sales, strong track record of performance, and solid relationships with reputable customers to demonstrate ability to generate sufficient cash flow to repay debt.

Outcome

• Project Capital+’s team obtained commitments for $50 million in pre-export financing from two major international banks at a cost less than half of what the company was paying to the local Turkish banks.

• The team worked together with management to implement the recommended strategy, ensuring the company meets the criteria of international lenders on an ongoing basis.

• The facility was first pre-export financing from international banks for agribusiness in Turkey.

• Management has understood the team’s added value and engaged the team to restructure the operations and financing of two additional family-owned companies.