Infatrade solved a deadlock concerning the inter-company guarantees of a large Industrial Group (hereinafter referred to as ‘Group’) in the Czech Republic.
Different banks had provided credit facilities (over USD 500 mil) to the Group and these were secured by intercompany guarantees. This created a dangerous situation whereby successful companies within the Group were guaranteeing companies performing badly. The cost of finance was very expensive and threatened the stability of the group.
A major customer of the Group was concerned about the ability of Group to fulfill its contract and refused to advance additional finance because the Banks, in order to reduce their debt, would block any funds received. The deadlock situation persisted.
Infatrade solved the problem by purchasing the Bank debt (over $ 80 million) without recourse and negotiated the terms of production and delivery of the contract between the Group and its customer. Infatrade solved the disastrous situation within six months.
The result was that the customer was supplied to its full satisfaction while all production costs incurred by the Group were fully paid. Infatrade recovered all the money owed to it by the various parties and the Group was no longer plagued by the debt that had caused a standstill for years.