Operating with the electronics and technology sector, our client – an international financial services provider – were asked to fund two highly automated production lines. These were being utilised in the manufacture of electronic safety systems in the automotive sector.
They approached us, as they needed to understand their collateral position over the duration of the funding term which formed a key input into their credit submission.
Initially, our involvement was a detailed desktop analysis of all the complex technical documents to understand the role of the modular cells forming the lines. Building upon this, we considered the supply commitments, alternative uses and economic lives of the assets, in order to build valuation profiles on both an in situ and ex situ basis.
In addition, we provided guidance around potential exit costs in the event of a default scenario and provided market commentary. The objective of which was to determine the potential resale markets for the assets as a whole and on a breakup basis.
The resulting report formed an integral part of a complex underwrite for a key strategic customer of our client. Part of our involvement helped them to understand in greater detail the Subject Assets, resale markets and exit costs associated with the equipment.