Transaction Date: December 2006
Amount: £700k

This prestigious chauffeur service was based in Central London and had a fleet of 50 leased vehicles and 60 drivers. It had contracts with first class corporate clients including major airlines. The company was funded by way of an invoice discounting facility.

Seemingly healthy, the Directors were unaware of the extent of the businesses’ liabilities to the Crown until a Revenue inspection. The Asset Based Lender was notified of the company’s financial position and immediately informed the Directors that no further advances would be made. This occurred in the week before Xmas, leaving the company under threat of staff leaving and jeopardizing the potential sale of the business to a competitor.

The Directors approached a London firm of Insolvency Practitioners who recommended that the company be placed in Administration with a pre-pack sale of the business to the interested party.

The lack of available funds from the Asset Based Lender to pay wages created a problematic situation. The interested party was not prepared to cover wages for a company they did not yet own, but without the guarantee that their wages would be paid, the drivers were not going to work, making the contracts and the work in progress worthless and no sale possible.

The Insolvency Practitioner approached Cable Finance who agreed to provide facilities to enable full repayment of the Asset Based Lender and meet the December payroll. The Administrator was, with the support of Cable Finance, able to sell the business to the competitor. This whole process took place within days.

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