Case Studies
Helping clients achieve success through CaaS
Case study: Multinational industrial company expects rapid global growth
Challenge
- Company has creditworthy US Subsidiary with sales of $200 million per year and significant assets in the US
- Subsidiary has high interest rate notes issued during Covid-19 dislocations in 2021 which it is retiring as soon as permitted under note debentures
- Subsidiary has bank loans with periodic rate resets
- Off balance sheet inventory funding is important for Subsidiary and Company
- Subsidiary does not wish to incur additional debt due to effect on credit rating and subsequent rate resets
- Subsidiary inventories are held in the US
How does 1TCC help?
1TCC purchases inventories from suppliers on Subsidiary’s behalf to improve balance sheet, credit rating and interest cost on existing debt
Improve Financial Metrics
Case study: Canadian hi-tech company mitigating key constraints to scale
Challenge
- Company has sales of $450 million per year
- Strong balance sheet with high cash levels
- Recent operating losses due to effects of Covid-19
- Contract manufacturers in Asia are shut down due to Covid restrictions
- Company views Covid problems as temporary and wants to be ready when production resumes
- Company is concerned that if it places a moratorium on orders from suppliers, they will lose their relationships and be moved to the bottom of the list for shipments when its contract manufacturers do resume productions
- Despite strong cash position, Company does not want to continue to draw down cash reserves over coming two quarters
- Company has a revolving line of credit, but inventories held at contract manufacturers facilities in Asia do not count for borrowing base. Bank will lend only on assets held in North America
- Company is not concerned with accounting treatment, but is seeking funding for inventories in Asia
How does 1TCC help?
- 1TCC purchases inventories
- From Company for later resale back to Company; and
- From suppliers to continue to build inventories of scarce components and maintain supplier relationships
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