A global advisory and investment firm has announced it has closed a deal with supply chain giant, Kings Transport Group, to refinance the company’s incumbent bank valued at $8M AUD, enabling Kings to execute its transformation plan.
Gordon Brothers provided the Asset-Based Lending (ABL) structure which focused on the company’s assets rather than earnings, ensuring Kings could implement their transformation plan without the constraints of heavy financial covenants.
The underlying collateral included 245+ motorised and non-motorised transport assets, with a sculpted amortisation profile to support operational cashflows.
Kings Transport Group, established in 1991, offers integrated supply chain solutions across Australia and New Zealand employing more than 800 staff and 1300 subcontracted drivers.
The deal comes at a time where many businesses have been affected by the fallout from COVID-19 and are seeking alternatives to traditional lending.
Matt Aubrey, Managing Director at Gordon Brother said the firm is proud to have played a significant role in helping Kings Transport Group execute its transformation plan through its Asset-based Lending structure.
“Kings are now able to execute their plan with the support of a facility focused on the assets rather than earnings,” he said.
Asset Based Lending is becoming more popular, even among investment grade borrowers because of its flexible structures that require no financial covenants.
“COVID-19, while disruptive, has also allowed companies to take the time to think about their capital structure and business plan moving forward, and convert their revolving credit facilities to Asset Based Lending facilities,” Matt said.
“For a number of asset and inventory rich businesses we are pleased to have played an instrumental part in providing these companies time and the runway to execute their transformation and turnaround plan.”
In May 2020, Gordon Brothers also closed a first of its kind deal to disperse more than 100 heavy haulage assets from one of Australia’s largest national freight companies in partnership with leading asset management and disposition company, Ritchie Bros.
“COVID-19 has presented us with many different opportunities. Recently we were involved in a time sensitive situation which required significant liquidity to be provided to a well-known tier one heavy haulage transport company to help them scale back their business by outright buying the entire assets in a non-core division,” said Matt.
“Prominent brands in heavy haulage, Kenworth Trucks and Drake trailers made up the majority of assets in the fleet, including 156 prime mover axles, and 308 trailer and dolly axles. The transaction window required by the seller was tight, and the deal needed to close by the end of the company’s Fiscal Year,
“The ability to appraise the fleet, understand the risks, and importantly complete the multi million dollar deal in a timely fashion was critical to achieving this successful outcome.”