Case study MCB Group
“MCB has found a good partner in Orchard for our financing and treasury issues. I am very satisfied with the pragmatic and expert approach. The extensive experience of the people at Orchard ensured that we obtained a solid outcome on the recent refinancing that both parties can look back on with satisfaction.”
Emiel van Boxtel, CFO MCB Group
Challenge
MCB Group (hereinafter referred to as “MCB”) is active as a wholesaler and Service Centre in metals, including steel, stainless steel, aluminium, copper and brass. Turning over more than 500 million euros, MCB is one of the largest independent metal traders in North-western Europe with strong market positions in the Netherlands, Germany, Belgium and France.
Solution
Orchard has assisted MCB with various financing transactions since 2011. The existing financing structure also provided a good basis to build on. The main targets for the recent refinancing were a longer tenor of the facilities, less stringent covenants and greater flexibility. This together with a good price.
In addition, new legislation has come into effect in Belgium in the beginning of 2018, which has greatly simplified the establishment and enforcement of collateral. This allows for higher advances on stock.
Results
All objectives of the refinancing have been achieved. In addition to more favourable rates, the term of the facility has been extended to 5 years (from 3 years) and the other terms and conditions have been greatly improved. The advances on stock in Belgium have also been improved. MCB was therefore able to take full advantage of its greatly improved track record and the favourable conditions in the financing market.
Despite the appetite in the banking market, MCB has decided to leave the banking group unchanged. This fits in well with the long-term relationships that MCB strives for with its customers, suppliers and financiers.
In addition to the new financing, cash management has been further optimized and a new interest rate swap has been transacted.