markr
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Post by markr on Jun 13, 2017 18:27:39 GMT
There's a ginormous C band loan on the primary market at the moment, one of the biggest unsecured loans for a while I think at £360500. Apart from not really knowing what they do (even from their website never mind the FC description), or why they need a loan, I can't see why they should be rated C risk, their credit score and financials look OK. Avoid or pile in?
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ceejay
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Post by ceejay on Jun 13, 2017 22:40:22 GMT
Upsides:
- the financials look ok on the face of it - a healthy company.
- decent interest rate
Downsides:
- this is funding for an IT project. How often do they go as expected, or deliver anything like the benefits offered? £360k isn't a lot of money for a major IT project and overspends are the norm, especially as this isn't a business-as-usual IT replacement (relatively easy to predict the cost) but rather their "next generation solution" (impossible to predict the cost or duration).
- they are wholly dependent on one industry (automotive) which is perhaps above all others at risk of severe disruption depending on how brexit works out. Will there even be a UK automotive industry in three years' time?
- and, of course, unsecured.
I might have a little dabble but I certainly wouldn't pile in.
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fasty
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Post by fasty on Jun 13, 2017 22:54:30 GMT
They already seem to have quite a lot of debt, and the repayments on this 36-month loan will not be trivial.
The rate is a full 1% less than you would get for an equivalent 60 month loan.
After getting my fingers burned by defaults, I prefer to target the longer ones but churn after a few months.
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Post by longjohn on Jun 14, 2017 12:08:42 GMT
I assume a shorter loan is more secure as a company that is struggling with cashflow would get the longest term possible to lower the monthly repayments.
I'm also surprised at the C rating unless there is something well hidden that we cannot find although if we can't find it FC's rather lax due dil will not have found it either.
It wouldn't surprise me if they came back for a refinance in six months time and got an A rating.
J
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kt
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Post by kt on Jun 14, 2017 13:11:20 GMT
Why have their Operating Costs increased so much? What is this £1.5M new debt in the last year?
These numbers make little sense, but this will have filled long before they feel the need to answer any questions.
Nice little cash injection before declaring bankruptcy?
KT
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adrian77
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Post by adrian77 on Jun 14, 2017 18:06:34 GMT
I am with KT - don't like the huge overdraft and the sudden need for extra funding.
I don't know the car industry but I would have thought there are already some very big international players already in this field. Also I looked at the web site and saw a promotional video which I think was in Arabic (I know Geordies can be difficult to understand!) It had very faint and small English sub-titles so not exactly impressed. Totally agree that IT projects often do come in way over budget and what security have we got hex 00 (zippo).
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