What we do

Case Study

Revolving Fund Emergency

1

Challenge

A business group operating in a strongly competitive and commoditized market, with a strong imbalance between the payment and receiving medium term deadlines, is faced with the cancelling decision of short-term financing lines that ensured their current activity and, at the same time, a brutal increse of spreads, thereby affecting the ability to meet their immediate commitments.

2

Our approach

If a company is unable to manage their defaulters ... they will take over your business

After a deep assessment of the Clients and suppliers balances accounts and their commitments, of the levels of required security stocks and, in a strategically concerted way with the company’s management, we assumed the key areas and introduced immediate improvement processes.

We assumed "in the front of the game" the position of direct interlocutors with the banking sector and we assume the negotiation of “muscled” Payment Plan with Clients and Suppliers.

At the same time, we have designed and implemented an internal plan for raw materials supply reprogramming, installed capacity utilisation reorganisation and redefinition of finished product’s security stocks.

3

Results

  • Improvement of the Banks perception. The explanation of the defined path and the systematic report allowed the relief of pressure of the financial institutions.
  • Reduction in the medium term of receiving, of 20 major clients in under 15 days, in three months of program.
  • Recovery of greater antiquity accounts which, together, represented more than 20% of total Client’s debts.
  • Structuring of financing lines for suppliers, enabling the anticipation of their claims, improving position to renegotiate new terms and conditions.
  • Transformation of short-term lines of credit of two main creditor banks in medium and long-term operations, without the need to provide additional guarantees.
  • Working Capital net reduction in 27%, leading the company to present the best economic result in the last 4 years.