Advisor to shareholder of ASX listed defence company

The major shareholder of an ASX-listed defence company engaged KordaMentha to provide advice on refinancing expiring debt facilities and supporting a turnaround plan, with a fallback recovery strategy via insolvency. The company, heavily reliant on a large multi-year contract with a foreign government, faced cashflow issues due to COVID-19 delays, necessitating urgent refinancing and additional working capital.

The engagement’s key objectives were to advise and make recommendations for ANI’s future commercial and charging options. This was to be achieved through:​

• Refinance expiring debt facilities.
• Support the company's turnaround plan.
• Provide a fallback recovery strategy via insolvency.
• Ensure the company's financial stability and future funding needs.

How we helped:

KordaMentha's approach was divided into two phases:

• Phase One: Immediate analysis of the funding request, downside scenarios, and security position. This included a deep dive into the major contract's terms and cashflows, and strategies for value realization in insolvency. The analysis revealed a higher funding need than initially requested, leading to successful funding within the required timeframe.
• Phase Two: Focused on the long-term outlook, future funding needs, and structuring the debt facilities. This involved a detailed 12-18 month cashflow forecast and discussions on the terms and structure of the debt tranches. KordaMentha led negotiations and documentation with the company and its other debt provider to achieve financial close.

The outcomes: 

• Phase one: $55 million financing completed within 2.5 weeks.
• Phase two: Restructuring and extension of Phase 1 facilities, plus an additional $17 million working capital, completed within 2 months.
  • De-risked the Group's financing position.
  • Significant make-whole provision ensured the shareholder's debt return.
  • The Group's share price increased by approximately 140% in 11 months post-Phase 1, providing further returns to the shareholder and the Group.
  • Ongoing advisory role valued by both the Group and the major shareholder.