Case Study: Hospitality

Client & Objective:
An accommodation and hospitality services businesses situated on the east coast, turning over approximately $10m per annum and on a rapid growth trajectory. Due to the nature of the plant and equipment, the cost to relocate the business to another premises was exorbitant and made any future relocation of their business untenable. As a result, management negotiated an off-market option to purchase the business’ leased premises to secure the long-term viability and growth strategy of the business.

Requirement:
Approximately $15m in senior term debt to facilitate the 100% finance of the premises, inclusive of stamp duty and all other acquisition costs. Successful implementation of the strategy required any incoming financiers to recognise a valuation that was 80% higher than contract price and lend against the higher value. A comprehensive understanding of the business’ unique cashflow was also instrumental in attaining broader finance support.

Solution:
HT Capital presented a detailed finance strategy which negotiated the upfront reliance on (the higher) valuation amount with an approved take-out strategy to refinance the facilities into a major bank within less than three months. This process leveraged out strong understanding of valuation methodology, coupled with experience in complex trading business assessment and debt negotiation with banks and funders, minimising costs and maximising the overall value delivered to our client.