UK
Ireland
ReSolve Intervenes, Saves Producer of Plant-based Liquids
ReSolve’s client is a leading producer of plant-based liquids (the “Company”), which has been a key player in the wider milks and juices industry for over a century.
The Company benefited from an early mover advantage in the plant-based milks space following initial investment in manufacturing capacity, ahead of the widespread adoption of the products.
Like many other businesses, the Company underwent a difficult trading period during the COVID-19 pandemic. Compounding this, they had invested heavily in infrastructure, faced mounting energy costs due to being heavily energy reliant and felt the impact of one of its largest customer contracts being pulled.
With concerns surrounding its financial situation in mind, the Company appointed a specialist advisor at the behest of the secured lender who, following an independent business review, recommended that the Company be put into administration. The advisor ran a special situations marketing campaign; however, this was ultimately unsuccessful.
ReSolve’s approach
ReSolve’s advisory team, led by James Dowdall, was introduced to the Company in Spring 2023 to help find rescue options. This included coaching members of the management team, providing feedback on key proposals and providing clear insight on the Company’s shortcomings with supporting solutions to ensure that productive conversations with potential investors could be had. The team also provided important insight into how the Company could streamline its costs by negotiating creditors down to enable greater balance sheet flexibility.
In May and June, the ReSolve team ran an Accelerated M&A process bringing out the very best in the business, the wider market opportunities and the strength of the management team. This more focused and comprehensive process bought a number of investors to the table keen to explore an equity investment.
The team then ran an informal CVA (company voluntary arrangement) process to cramdown certain creditors while preserving others, using investor funds to settle obligations and with creditor compromise agreements forming a condition of the investment.
Result
The effect of this process presented an improved opening balance sheet position with material reduction in the company’s obligations, creating the environment for investors to come in and recapitalise the business.
With the support of ReSolve, the business successfully recapitalised and is now debt free. The Company, along with 350 new jobs, has been saved, a great result for the business and the local community. The Company has gone on to win two new significant contracts and is now positioned well for future growth.
We are thrilled with the outcome here, and are pleased to see that our work has added immense value to both the Company and its stakeholders. We are delighted that they will continue to operate and that we have saved hundreds of jobs in the process. We wish everyone at the Company continued success as the business moves forward.
This article was originally published on ReSolve Advisory Limited. On 28 October 2024, ReSolve Advisory Limited joined S&W Partners LLP (formerly Evelyn Partners LLP). While considerable care was taken to ensure the information contained within this article was accurate and up to date at the time of publication, no warranty is given as to the accuracy or completeness of the information. No liability is accepted for any errors or omissions in such information or any action taken on the basis of this information.