FNsteel
Refinancing of its current financing facilities by an asset-based financing package
- Following our engagement in 2018 for FNsteel, one of the leading niche players in Europe for the production of customized wire rod as well as drawn wire, Avaxa was engaged again in July 2022 for the refinancing and increase of its ABF facilities;
- FNsteel is a wholly owned subsidiary of the Chinese conglomerate Jingye, which also owns British Steel;
- Following turbulent market circumstances, resulting in an on-going volatile financial performance and covenant breaches, FNsteel’s relationship with its incumbent bank had significantly deteriorated;
- Anticipating – based on our previous engagement for FNsteel in 2018 – limited appetite from traditional Dutch Asset Based Lenders due to the challenging credit profile, Avaxa compiled a comprehensive long-list of 25+ alternative lenders specializing in asset-based financing. A two-phase process was mapped out, including a go/no-go decision point subsequent to an initial market sounding conducted via a no-names Teaser;
- Avaxa initiated contact with the long-listed lenders using the no-names Teaser to conduct the first market sounding and assess appetite and feasibility of the envisaged refinancing;
- The market sounding yielded positive results, as several alternative lenders expressed a strong appetite for providing financing to FNsteel. This led the management to green-light the continuation of the refinancing process with a shorter list of selected lenders;
- Following a competitive process, FNsteel was able to successfully refinance through a EUR 35mln asset backed financing package, based on FNSteel’s trade debtors, solely provided by Coface Factoring;
- Avaxa supported FNSteel throughout the entire refinancing process ensuring rapid response time, streamlined communication and proactive stakeholder management from start to finish; and
- Finalized in May 2023, the new financing package equips FNsteel with the operational flexibility and financial headroom required to execute its turnaround strategy and explore opportunities for further growth.
