Sovereign Credit Management Limited (SCM)

The Problem

SCM has been at the forefront of its sector for 20 years, providing outsourced credit control, corporate debt collection and debtor verification services to banks, invoice financiers, asset based lenders and insolvency practitioners.

In order to meet the stringent service criteria required by the banks and major lending houses, Sovereign Credit Management had invested heavily in high quality systems and reporting processes. These high, fixed overheads, coupled with the on-going turmoil in the financial sector had a significantly detrimental effect on the Company’s financial position and performance.

The Solution – how we helped

MLG Associates were first consulted in July 2012 to assist SCM with a targeted programme of approaches to potential new investors who could help with restructuring the business and take it to its next phase of growth. In addition we maintained the flow of information and communication with the stakeholders including the incumbent investors and major creditors.

We prepared and managed the distribution of business information memorandum and assisted the Directors in the negotiation process. An early deal was brokered but unfortunately fell through at the end of August. Consequently, a review of the options available led to a second phase – finding a buyer for the business and its assets.

Once again we managed the contact process and negotiated the successful sale of the business and its assets to the Winterhill Largo Group. Mike Grieshaber of MLG Associates was appointed as Administrator on 12th September and a “pre-pack” sale was completed on that day. Mike continues in his role as Administrator to recover the residual assets.

By securing this sale, we were able to bring about the following benefits:

  • Better realisation of assets - the sale of the entire business in situ as a going concern was a shorter process with far greater return and lower costs than a piecemeal break-up scenario.
     
  • Saved jobs – employees transferred under the new ownership.
     
  • Enhanced dividend – timely and effective management by MLG Associates has produced a significantly better return for the secured and unsecured creditors than would otherwise have been the case.