IBR of a waste recycling company

Investments in a modern recycling installation combined with mandatory loan repayments had led the company into severe liquidity pressure. Due to these cash shortages the company was forced to prefer cash over return when making business decisions, which was not sustainable in the long run. As a result the EBITDA decreased substantially. To extend and possibly expand the credit facility with the bank, the company asked Beaufort to conduct an Independent Business Review including an analysis on the pre-Corona results. Also the risks relating to the lender of real estate and the recycling installation had te be identified, as the company had a favorable option to buy the real estate but also had recent legal issues with this party. By making an in-depth analysis of the financial and underlying operational figures, Beaufort identified the root causes for the decrease in return and liquidity in the last 12 months, which for the greater part was not Corona related. Furthermore Beaufort drafted, in cooperation with the management team, possible future scenarios in which the strategic options were identified. On this basis, the bank facility has been continued pending an additional capital injection.

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