Transaction Date: October 2008
Amount: £900k

This well-respected IT recruitment company was based in Bedfordshire and had been trading for over seven years.  In 2006 it had turnover of £15m and employed 30 staff.  The company was funded by an invoice discounting facility. 

In September 2008 the company ceased to trade and dismissed all staff without warning, leaving its Asset Based Lender in a very difficult position.  The Asset Based Lender needed to appoint Insolvency Practitioners but due to certain complexities of the creditor position was reluctant to act without a clear plan of action.  Recoveries from debtors formed the most valuable assets of the business and it was therefore crucial to find a suitable purchaser to protect their position.

Cable Finance was approached by another recruitment company that had commenced negotiations with the proposed Insolvency Practitioner to purchase the remaining goodwill of the business plus unbilled work in progress.  It had become clear to the prospective purchaser that a deal would be very difficult to complete without negotiating a settlement with the Asset Based Lender over terms to provide support for the collection process.

Cable Finance entered into negotiations with the Asset Based Lender and agreed to provide the requisite finance necessary to purchase the debtors, the unbilled work in progress and the goodwill. In that way Cable Finance provided a financial solution that preserved substantial value for all the stakeholders.

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