Complete bank refinancing of a centuries-old family Group, releasing substantial new liquidity for future growth
A strained relationship with your house bank need not halt a company's growth trajectory - provided a thoroughly substantiated refinancing plan is in place.
Liquarto supported a family-owned group of four companies through the complete refinancing of its bank debt, after the historical house bank proved no longer willing to support the Group, and in doing so released substantial new liquidity for further growth.
The situation
The Group today comprises 4 mature companies. It was founded at the end of the 18th century and has since survived, among other events, the Belgian Revolution and two World Wars. Today, the 7th generation is at the helm.
Due to a combination of external factors, however, the Group posted losses over the past three years. Despite the Group consistently meeting its obligations, and despite having overcome greater challenges in the past, this gave rise to a breakdown of trust with the house bank.
Two elements defined the mandate:
- the house bank was not willing to provide additional financing, despite a sound track record,
- the shareholders were convinced that, provided sufficiently ample and well-structured credit lines, the Group could return to profitable growth.
Liquarto was mandated to guide the complete refinancing process.
The challenge
The assignment called for:
- an objective, figure-based substantiation of the Group's viability, despite three loss-making years,
- convincing new financiers without the support of the historical house bank,
- a financing structure leaving sufficient room for the planned growth trajectory,
- and keeping the historical house bank involved as a party, even though it could no longer contribute to the solution itself.
A generic refinancing file offered no answer here: only a thoroughly substantiated, forward-looking financial plan could win the trust of new financiers.
Liquarto’s approach
As with every engagement, Liquarto started with a thorough get-to-know phase, before leading the complete financing process.
1. Getting to know the shareholders, management and the business
Liquarto got to know the shareholders and management well: what drives them, what is their vision, what are their values and standards, how do they see the future of the Group? In addition, the business itself was thoroughly understood: what drives revenue, margin and costs, which external factors have an impact, and how quickly the Group can respond to changing circumstances.
2. Financial analysis and a 5-year budget
The historical financial statements were analyzed in detail, together with the existing financing structure (bank loans, security granted, support through supplier credit). Based on this, Liquarto drew up a 5-year budget per company and consolidated for the Group - income statement, balance sheet, cash flow statement and investment budget - and tested this budget through variance analyses on changes in margins, production time and investments.
3. Structuring and attracting the financing
In consultation with the team, the desired financing structure was determined to enable the planned growth trajectory. Liquarto then activated its network among financial institutions and non-bank credit providers, guided the introductory meetings with the Family and the Team, and subsequently conducted the financing-technical discussions and negotiations bilaterally. The house bank - which in the meantime monitored the file through its Intensive Care department - was also kept informed throughout the process and invited to contribute to the desired solution.
The outcome
The completed process led to a solution combining all objectives:
✔ Two financiers submitted a binding proposal for the complete refinancing of the Group.
✔ The Family regained the choice of determining with which financier to move forward.
✔ The refinancing was realized with a well-known Belgian financial institution, with Liquarto's guidance through to the loan documentation, the security documentation and the funds flow.
✔ The historical house bank was fully repaid.
✔ Substantial new liquidity was released for the further growth trajectory — the transactions together represent a volume of more than EUR 6.0 million.
✔ The Group can fully focus on its core activity again.
The added value of Liquarto
This case illustrates how Liquarto can offer companies renewed perspective, even under pressure from a strained banking relationship, on the basis of a thoroughly substantiated financial plan.
Liquarto combines:
- in-depth expertise in financial analysis and long-term budgeting,
- an extensive network among bank and non-bank financiers,
- and a strong negotiating position with financial institutions.
Are you experiencing tension with your house bank, or would you like to review your financing structure with a view to further growth?
We would be happy to reflect on this with you.
