Hired a new sales associate today after a couple months of interviewing.
Submitted a letter of intent to GE Capital and Wells Fargo to buy out their respective $5.7MM and $6.7MM equipment-based loans for a discount.
Under the new terms, the loans would be restructured into 5-year loans at 6-8%, and we'd be getting a 50%+ discount on the face value of the notes. Best part: we'd be fully secured in the event we had to liquidate the equipment and obtained less than salvage values.
We're of course trying to help turnaround a distressed industrial processes business whose loans are coming due in the next few months, whose current operations can no longer support the debt.
The consultant I'm working with has a history of navigating the maze with distressed companies and has succeeded in 100% of his cases to avoid filing for bankruptcy. I told him that was pretty impressive, but unless the lenders are willing to take a serious haircut or restructuring of the debt here, they're going to have to file Chapter 11.
Sometimes you have to be the "3rd Alternative" for a 3rd Alternative solution to play out between 2 opposing parties.
Our proposal is contingent upon the debtor agreeing to enter into a new loan and turnaround program with us.
We'll see if they go for it.