Refinancing Review (R-IBR)

In practice, covenant breaches are often the trigger for a Refi-IBR. This means, for example, when covenants, contractual clauses or ancillary agreements in loan agreements can no longer be met by companies. Based on the Refi-IBR, new, more resilient agreements can be agreed upon with the companies. By focusing on specific issues, it is also possible to obtain information on how new business areas or certain locations have developed, for example. Or perhaps the business model has been adapted and the financier wants to obtain a neutral overview of the development of the strategy through a quick check. The advantage over a restructuring report is that the compactness and the individual orientation or focus on the respective company can quickly produce valid results.

An automotive supplier was only partially able to pass on steel price increases to its customers and increasingly tied up capital in inventories due to supply chain difficulties. This led to a deterioration in earnings and liquidity. Deviations from plan led to a corresponding loss of confidence on the financier’s side. As part of an IBR, we conducted an extensive market and competitive analysis and installed a stringent working capital management system. Our market assessment formed the basis for price negotiations with customers and led to a ten percent increase in revenue. This stabilized the financial planning, and the earnings gap was closed. Then, nothing remained in the way of refinancing by the financier.