Our client was one of the leading IT infrastructure solutions providers in Saudi Arabia and worked on a tight net profit margin. The Company's contracts were largely with Saudi governments' entities. Payment delays from large clients created liquidity constraints on the company which paid its suppliers within 30-60 days to enjoy substantial rebates.
We were appointed as exclusive financial adviser to work with the client and its lenders to achieve the following objectives:
Arrange flexible financing alternatives to bridge the gap between the realisation of receivables, the need to pay suppliers early and accompany the company’s working capital requirements as it grows.
Approach suitable market counterparties to gauge appetite, pricing and ability to meet time constraints
Negotiate counterparty pricing and covenant language
Assist in the negotiation of loan documentation to ensure it was commercially acceptable to the client
Based on our analysis which considered the client's business plan, financials, liquidity, capital structure and the financing requirements, we identified the optimal liquidity strategy. We then worked with the client to structure the financing, the securities in order to ensure it was economic and compliant with the Board requirements. We produced a credit report which outlined two potential financing strategies that met with the objective set out and our recommended strategy.
The report contained a description of the company, its sector of activity a detailed financial analysis, key risks and a financing strategy with clear explanations of pros and cons, indicative facilities term sheet and scenario analysis on key financial ratios.
Compile a term sheet detailing the terms of the requested facilities:
Utilise Marisk's extensive market knowledge to approach a number of known financial institutions in Saudi Arabia and the GCC
Recommend a preferred bank counterparty based on the appropriateness, cost effectiveness and indicative pricing received and our experience regarding their ability to complete the transaction in a timely manner
Coordinate the required compliance documentation to ensure the completion of the financing within the required timeframe
Next, we coordinated KYC documentation and liaised with the client, our client's audit firm and the lender to ensure the financing documentation was commercially acceptable to all parties.
Final closing of the financing with NCB-Al Ahli bank
By working together with the client and the banks, Marisk were able to achieve the following:
Sourcing a new bank counterparty
Bespoke financing strategy to meet the Company’s liquidity objectives
Co-ordinating the completion of the KYC requirements for the financing implementation
Cost savings on closing due to finding most competitive counterparty
Co-ordinating securities and final closing