Inolex Chemical

Division: Phoenix Capital Resources


Client

Inolex Chemical was a $60 million specialty chemical company based in Philadelphia, PA.

Problem

Due to several large one-time, extraordinary expenses, the Company violated its cash flow covenant, which exhausted the patience of an already frustrated four-bank lending group. The sensitivity of the bank group was further heightened by an unannounced change in management. Management attempted to refinance the Company on its own, costing the Company valuable time and significant forbearance fees in exchange for extensions. When these efforts proved unsuccessful, the bank group required the Company to engage an investment banker.

Solution

Phoenix Capital Resources delivered a financing memorandum within three weeks of engagement. Phoenix was able to identify, justify, and quantify add-backs and adjustments to EBITDA that significantly increased the amount of leverage available to the Company. In addition, Phoenix Capital was able to source term facilities on the Company’s plants based on ‘In-Place Value’ as opposed to the more traditional and conservative Orderly Liquidation Value. Due to the properly structured $26 million facility, the Company has returned to a healthy, profitable, appropriately capitalized operation.