Services: Access to Capital, Financial Advisory Industries: Energy/Utilities/Environmental, Technology Professionals: Henry Owsley, Peter Kaufman Business Profiles: Private Equity / Entrepreneur Representations, Shareholder Successes
Gordian was engaged by a clean energy and technology fund with a distressed portfolio company; the Company was successfully sold and both the Lender and the Client received substantial economic benefits from the transaction.
Client: Gordian was engaged by a clean energy and technology fund with a distressed portfolio company (the "Company"). The Client was one of several minority equity investors in the Company.
The Company was threatened with foreclosure by its senior secured lender. The Company developed and marketed cost-effective fuel additives to reduce harmful pollutants and enhance the combustion performance of fossil and renewable fuels, such as diesel, biodiesel and residual fuel. It was uniquely positioned within the market with a proven, patented technology and the required regulatory certifications in several major states.
Gordian quickly evaluated the Client’s strategic alternatives with regards to its investment in the Company in light of the foreclosure actions being pursued by the Lender. After developing a creative and credible “carrots and sticks” strategy, Gordian was able to implement the most advantageous transaction possible for the Client – a rescue financing at terms favorable to the Client. Given the alternatives Gordian presented to the Lender, it ultimately – and unhappily – consented to our deal.
The Client jointly foreclosed on the assets of the Company with the Lender and gained 100% of the Company’s equity. This allowed the Client not only to have a secured position in the Company’s assets, but also to realize any upside from a possible sale or other liquidity event. As part of the deal, Gordian was able to negotiate a pre-agreed proceeds sharing formula with the Lender in the event of a sale – one that ensured that the Client would receive pro rata proceeds from a sale even before the Lender is paid in full. The Company was successfully sold and both the Lender and the Client received substantial economic benefits from the transaction.