Investment secures future of Audiovisual Company.
Hi-tech Media. Capital & Restructure
Orbital Sound Ltd is an audio-visual equipment hire and sales company based in London. ReSolve was introduced to Orbital by the Company’s solicitor. They had suffered in recent years due to a poor investment in a US subsidiary which had since been closed. As a consequence it was in need of additional working capital which its bank was not prepared to provide. The Company had constraints for further credit with many of its Hire Purchase creditors – critical to its day to day operations – and had also recently had to negotiate a time to pay arrangement with HMRC. With increasing pressure from the HP creditors there was a real risk of insolvency.
Rather than looking at the insolvency options available ReSolve proposed a refinancing of the Group’s primary debt facilities (c£1 million) and the provision of a much needed working capital facility of up to c£750,000. The objective was to give the Company the time and resources to undertake the restructuring necessary to see through its recovery plans. The proposal included refinancing and consolidating the existing mortgage and overdraft into one mortgage secured against the freehold property and providing a credit facility for the Company secured against the property and unencumbered kit and equipment that could be drawn on to top up working capital as and when necessary.
With the right intervention from ReSolve the Group avoided insolvency just in time. A winding up petition was received from HMRC shortly prior to completion which needed to be settled. Management was then able to commence the necessary restructuring of the Company, including a rationalisation of staff and closure of a leased site that was no longer needed. HP creditors were brought up to date and payment of monthly and quarterly repayments recommenced.
Having stabilised the Group, management started the search for a longer term lender and 9 months after completion successfully repaid ReSolve in full together with all costs and charges.
The Group now continues to grow, secure that it has a sufficiently strong and stable balance sheet to weather storms.