Client Retains Control of Business
Client presents with the following scenario:
- Client had a bank loan of $5,000,000 to originally fund the purchase of two commercial properties. Total property value of $8,000,000.
- The bank had a charge over the client’s company and held a 1st Registered Mortgage over both commercial properties.
- Client had been in default for 5 months.
- Client had secured a contract for their services with a Government department, however creditor payment terms had been extended placing stress on the client’s cash-flow.
- A one-off refurbishment was made to one of the commercial properties which resulted in further strain on available funds.
- Client had a payment agreement with the Australian Taxation Office (ATO) for an amount of $150,000.
- The bank sought to appoint Receivers.
Client’s objectives were:
- Avoid Receivership.
- Obtain an extension from the bank of six months to enable cash-flow to stabilise after capital expenditure on refurbishment and to start receipt of monies from Government contract.
- Capitalisation of arrears.
- Remove default interest.
- Utilise six month time frame to clear debt to the ATO.
- Maintain control of the current company.
DJ Partners achieves results for clients:
Following discussion with the Bank DJ Partners confirmed:
- Ensured that no Receiver was appointed.
- Secured a six month extension with the bank to allow client sufficient time to stabilise their business and cash-flow.
- Capitalisation of arrears and the removal of default interest.
- Total debt was refinanced to another bank within the negotiated timeframe as a performing customer.