Transaction Date: April 2008
Amount: £2.8m

This 12-year-old company designed and imported menswear from the Far East for sale to department stores and other retail outlets in the UK. In 2006, the company had a turnover of £12m and employed 60 staff at an office/ warehouse in Luton and in three shops in London.

Funding was provided by a trade finance facility incorporating invoice discounting, stock finance and letters of credit to overseas suppliers. The facilities were secured by way of an all assets debenture and personal guarantees from the Directors. In 2007, a firm of accountants carried out an Independent Business Review and recommended that the Bank exit its position by April, 2008, being the optimum time in the company’s trading cycle to mitigate large potential losses. The Directors attempted to refinance but by the end of February 2008 they were running out of time.

On the recommendation of their solicitors, the Directors approached Cable Finance in late February 2008 to secure funding to replace the combined £3.3m in trade finance owed to their Bank. Cable Finance’s view was that there was little chance of refinancing the entire facility.

Cable Finance assisted in the negotiations of a steeply discounted settlement with the Bank. This was structured by way of a pre-packaged Administration funded by Cable Finance.

Cable Finance provided the funding necessary to pay the bank as well as providing an additional £500k short term loan to the purchasing company, pending it finding a long term funding partner which it did within two months.

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