Navigating Through Voluntary Administration: A Case Study of Resilience and Recovery
Industry: Transport
Business Stage: Mature
The Challenge
In an industry where timing and reliability are everything, one transport company faced the ultimate test of resilience. Pursuing a dispute against their landlord, coupled with a poor strategic decision to use unpaid taxes as working capital, led to an unavoidable voluntary administration. The situation was dire: working capital was depleted, and the need to replace an ageing fleet became critical as their credit rating suffered.
Hermes Capital’s Intervention
Hermes Capital was introduced by an experienced finance broker, bringing the opportunity for a successful outcome. Understanding the unique challenges faced by the business, Hermes tailored a funding solution that not only addressed immediate financial needs but also laid the groundwork for a sustainable future.
The Solution:
Hermes structured finance along the following lines:
- An Invoice Finance Facility: Hermes provided an invoice finance facility with an 80% advance rate against receivables, injecting much-needed working capital into the business.
- Term loan facility: A term debt facility was structured against the company’s trucks and property, offering a lifeline to pay out the incumbent bank and contribute to the Deed of Company Arrangement (DOCA), all structuring payments to fit within the firm’s financial forecasts.
The Impact
Hermes Capital’s support was instrumental in navigating through the voluntary administration. By paying out the bank and providing essential working capital, Hermes enabled the business to maintain operations and protect its workforce. The approach was not just about financial assistance; Hermes brought patience, expertise in business restructuring, and an ability to work harmoniously with various stakeholders, including the bank and the administrator.
Beyond Administration
The completion of the voluntary administration and the establishment of the DOCA marked a new beginning for the transport company. With Hermes Capital’s continued support, the business has moved to new premises, embarked on a journey of growth, and begun upgrading its fleet. The relationship between Hermes and the business has evolved into a partnership, fostering stability and growth.
“The support from Hermes Capital was transformative. Not only did they provide the financial solutions we desperately needed, but they also stood by us, guiding us through every challenge. Thanks to Hermes, we are not just surviving; we are thriving.”
– Director
Outcome
The future looks promising. The transport company is on a growth trajectory, thanks to the foundation laid during its most challenging period. Hermes Capital remains a key partner, supporting the company’s ambitions and financial health. The resilience and recovery demonstrated by this transport business serve as a testament to the effectiveness of tailored financial solutions and the power of strategic partnerships.
This case study exemplifies the critical role that specialized financial solutions play in supporting businesses through periods of distress. The journey of this transport company, from the brink of failure to a path of growth and success, underscores the value of understanding, patience, and strategic financial support. Hermes Capital remains committed to empowering businesses with the tools they need to overcome adversity and seize opportunities for growth.