During a safe harbour advisory assignment, Avior Consulting identified issues with security interests registered against the Company and formed the view that the Company’s assets were largely unencumbered. This created the opportunity for Avior and its investor group to fund the Company’s restructure on a completely secured basis. Concurrent with the appointment of KordaMentha as administrators, the Avior group advanced initially $1.5m plus a further $0.5m later on. This loan was secured by assets valued at more than $8m.
As part of a recapitalisation strategy, Avior designed its own Deed of Company Arrangement proposal, which was approved by the Company’s creditors at the second creditors meeting.
It became apparent over time that market conditions were unlikely to be conducive to completing the recapitalisation in the short-term. In this situation an opportunity to sell our debt emerged, which was preferred by the investor group. The loan was sold and Avior’s group exited after approximately 9 months with a 28% return on its investment (36% in annual terms).
This project demonstrated that Avior could successfully develop its own DOCA strategies and be a special situations lender.
Recapitalisation funder and strategist / DOCA proponent
Avior’s investor group achieved a return of 28% (36% per annum) on their completely secured loan.