Summary of Scenario:
- The client was a large wine producer in Australia.
- Dispute with supplier leads to the supplier and then bank filing for liquidation.
- The client lost control of key business asset and was in distress.
- AR Cash Flow helped avert liquidation.
- The client has potential to generate $40 million in turnover.
The Details of the Transaction:
Ask any financier about what makes them the happiest – profit earned or seeing a client flourish after they have helped them out? (They will probably say both – but you get the point). We often let the trivial details mar the simple yet extraordinary and important side of our business – The Humane Side. This forms the base of what we do and continue to do. What better happiness than helping out a client’s business and see it flourish, especially one that was at the brink of destruction.
We were introduced to one such client by the ever reliant Stak Enterprises. This was a client who was involved in the ultra-competitive wine industry for the better part of a century. He had managed to carve a niche for himself by selling extremely good quality wines for a competitive price. He had a huge winery and had captured quite a bit of the market share. This was a business where nothing could go wrong.
In a cruel twist of fortune, problems began to arise with one of the suppliers. What started out small ended up with the supplier appointing a liquidator for recovery. One thing led to another and this triggered the bank facility to default. Like all banks do – they quickly appointed a receiver to collect out their debt. The client lost control of their winery – their main source of raw material. The once flourishing business was instantly faced with the prospect of total annihilation.
AR Cash Flow was presented by this complex and extraordinary case. We identified that, despite the liquidation process being underway, the client had enormous latent potential and it would be a criminal waste of resources if all of this went to bust.
- They were a 100-year old wine brand.
- They had a strong branding for their wines.
- The potential for further growth was enormous.
After a detailed analysis, we offered them a deal. We divided the deal into two parts – one, to pay off the bank debt and second to solve the dispute with the supplier. This would help bring control of the winery back to the client which would be crucial for them. We went a step further and decided to fund the clients for packaging of the wines. We have now successfully paid off the bank debt and are now negotiating with the supplier for a settlement figure.
This whole process was a huge game changer for the client. In one bold stroke, we helped recover a business that was on the brink of total liquidation and helped restore it to where it rightfully belonged. We analyzed the hidden potential and helped revive a sleeping giant. With our help, not only will the client be able to get back to its feet and continue the rich tradition of wine production. They have also managed to secure more customers for the wines. The wine sales could reach as high as $40 million.
What better satisfaction than to help a client achieve their true potential?
This transaction was structured by Leigh Dunsford at Stak. If you have a similar situation on your hands, please call Leigh on 0402383949.
You could also contact us directly by emailing [email protected]and we will set up a quick chat.
Please see links below for our previous case studies: