Пересмотр проблемного актива

Revision and sale of an unprofitable asset

Our team was hired to facilitate the transaction in 2014.  Our client owned a struggling industrial property he wanted to sell. The land that the plant was sitting on was located in the city’s downtown area and had high liquidity.

Revision of the asset

It was decided to demolish all the buildings on the land and sell it for development. The buildings were pledged to the bank as security for the company’s loan portfolio.

It was necessary to get the loan portfolio in order to ensure that the property was free, clear and discharged of encumbrances before the sale. This, however, required funding.

We devised the structure of the deal and arranged with the client that a preliminary contract should be signed with the SPV on the transfer of the land to its ownership.

The preliminary contract provided for an advance bank guarantee to cover the costs of the asset’s pre-sale preparation.  We also prepared the documentation package for the bank, including the feasibility study of the proposed transaction. Then the bank issued a bank guarantee.

Sale of the asset

After the advance payment was received, the buildings were demolished. Our client derived an extra benefit by selling the demolition scrap. The debt was bought back from the bank at a discount.  The land was prepared and sold.

The return on the sale of the land exceeded any potential profit the client could have made if he had instead decided to continue running the business.

When dealing with unprofitable assets, it is necessary to weigh all the options, take a step back and evaluate the asset objectively.

Sometimes the management and shareholders get so bogged down with issues at hand (in our case it was the loss-making business) that they find it hard to approach the situation with an open mind and decide to shut the business altogether.  Sometimes an optimal decision is to close the project, and sell it as an incidental asset.

Разрабатываем Стратегии для собственников бизнеса в целях оптимизации группы компаний, решения нестандартных задач и продажи активов. Оказываем услуги по сопровождению сделок M&A, управлению непрофильными активами и проектами в целом.

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