Debt Re-profiling for a Luxury Retailer
Luxury retail group, UAE
A retailer of luxury brands with outlets across UAE malls and retail parks came under severe cash flow pressure when lockdown removed sales revenue. The underlying business remained viable, but funded facilities held with multiple local and international banks needed restructuring and rationalising to avoid default.
Scope of work
Business plan tested in depth to confirm it was robust enough to carry the restructured debt through the recovery, with a detailed financial model built to support the lender discussions.
Management information strengthened, so all stakeholders had timely access to performance data during the restructuring.
Lender confidence built through two structural changes:
- An innovative collateral management arrangement improving the security structure
- A collection account created, giving lenders full visibility of trading performance
Term sheet prepared from the lender discussions, with multiple rounds held across local and international institutions to reach consensus on re-profiling part of the debt while working capital support continued.
Implementation coordinated, running all lenders' meetings, advising the lenders' agent on post-approval implementation, and completing documentation with both legal counsels.
Outcome and value
- Unanimous lender approval secured across local and international institutions.
- Part of the debt re-profiled while working capital support was maintained.
- A bankable funding structure put in place for the recovery.
- Default avoided on a business that remained fundamentally viable.