Briar Capital Real Estate Fund closed a $10 million debtor-in-possession (DIP) loan for a chemical manufacturer in Houston. Using the company’s manufacturing plant and excess land as collateral, Briar Capital provided a DIP loan facility to allow the business time to reorganize and position itself for an exit in the future.
Briar Capital was brought into this transaction by an investment banking team that had been hired to market the business for sale several years ago. After emerging from a costly two-year exclusive courtship by a business suitor that failed to perform, this company found itself challenged from a liquidity standpoint due to changes in its supply chain and other business conditions and was forced to file for bankruptcy protection.
After exploring several alternatives, the investment banking team felt Briar Capital was uniquely positioned to provide a real estate DIP loan due to its real estate lending expertise, both in and out of bankruptcy, as well as its relationship with the company’s current working capital lender. Working hand and hand with the ABL lender and investment banking team, Briar Capital crafted a plan to ensure the company had access to enough capital to effectively manage the business while in bankruptcy and allow the investment banker time to remarket the business once again for sale.
“With the assistance and cooperation of the ABL lender, we were able to use the equity in the company’s real estate to provide them access to a significant amount working capital that will take them well into 2024 and allow ownership to opportunity to maximize the sale price of the business,” Leah Goldberg, CFO of Briar Capital, said.
“Our unique experience in this space affords us opportunities like this to work closely with other lending and referral partners” Jeff Van Sickle, president of Briar Capital, said. “As the longest tenured and most experienced real estate lender focused exclusively on the owner-occupied real estate space in the country, we appreciate that others in the industry trust us and we take earning that trust seriously.”
