A national commercial vehicle hirer were experiencing cash flow issues, owing eight banks and four vehicle manufacturer funders £164M. Quantuma advised on management’s cash flow issues and restructuring plans and set out some options.
A national commercial vehicle hirer with a fleet of approximately 6,000 general and municipal vehicles were experiencing cash flow issues, owing eight banks and four vehicle manufacturer funders £164M. The company have eight depots nationwide with a workforce of 360 people across these locations but due to the money owing, their funding had been compromised revolving hire term loans, purchase and overdraft facilities.
Following reduced customer demand which had led to a sharp drop in vehicle utilisation rates and turnover impacted as a result of new entrants to the market and a fall in second hand vehicle prices, the company enlisted our restructuring advisory services.
The company had accelerated its vehicle disposal program but faced a significant shortfall of £7.5M.
We initially advised on management’s cash flow issues and restructuring plan and set out some options.
Whilst negotiations took place over an eight week period, the senior bank agreed to temporarily increase facilities to meet peak requirements. We enabled meetings with all funders to set out short and medium-term plans and we requested a repayment holiday. Securing the support of all funders, we were able to provide a three-month repayment holiday period providing the time to generate sufficient cash to meet shortfall and headroom for contingencies.