Case 2 Global Agri-Solutions

Richard Marney () and Timothy Stubbs ()

Chapter Chapter 5 in Emerging Markets Debt Restructuring, 2024, pp 245-297 from Springer

Abstract: Abstract In this chapter, the second of four case studies is presented. This case deals with a cereals export–import company, whose fast growing, short-term working capital finance dependent business runs into the global COVID-19 pandemic. The company’s business is gravely affected by the public health measures limiting mobility, which disrupt economic activity in its export and import markets, and the international transport network. As a result, the operations swing into a loss, cash flow declines markedly, and multiple loan covenant breaches occur. Two lenders move to enforcement, threatening the company with bankruptcy. With strong support from the shareholders and most lenders, the company succeeds in overcoming the two uncooperative lenders and securing new funding in very challenging market conditions.

Keywords: Agricultural commodity; Cost-plus contracts; Cereal (grain) trading; Cash conversion cycle; Working capital; Inventory; Accounts receivable; Accounts payable; Deferred payment terms; Inventory days on hand; Average collection period; Collateral; Secured lending; Cash flow; Gross margin; Cash flow from operations; Ebitda; Short-term debt; Long-term debt; Pandemic; Vaccines; Social mobility restrictions; Lockdown; Private equity; Majority shareholder; Minority shareholder; Rights issue; Covenant breach; Event of default; Acceleration; Enforcement; Legal audit; Finance documents; Super senior debt; Restructuring agreement; Existing finance documents; Inter-creditor arrangement; Representations and warranties; Security; Longstop date; Governing law and jurisdiction; Conditions subsequent; Put and call agreements (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/978-3-031-66838-8_5

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