Daily News: November 10, 2014

KTC Provides Government Contractor Production Facility

King Trade Capital announced a $500,000 production facility for a government contractor.

A former client of King Trade Capital recently completed a restructuring of its balance sheet by infusing equity into the company through a preferred stock offering. The new investor group appointed a turnaround consultant who previously worked for the client and is well-known by KTC. When KTC learned about the recapitalization, it reached out to the turnaround consultant, now CEO of the company, to learn more.

Due to its poor performance prior to the recap, the company had exhausted access to all traditional forms of financing. Although the company was cash flush due to the equity raise, the CEO wanted to accomplish two things following completion of the initial turnaround initiatives: rebuild the company’s credit by establishing a relationship with a finance company and increase the availability of credit to support the return of capital to the equity investors.

KTC had a unique idea and structured a solution aligned with the CEO’s goals. Since the company is currently sitting on an order backlog that should provide more than $1 million of positive cash-flow following fulfillment, KTC proposed a production finance facility that will allow the company to return capital to its investors, accelerating returns and maintain the ability to execute upon their growing contract backlog. KTC was able to expedite the return of equity to investors while helping rebuild the credit of the company.