As part of our Road to Recovery series, we explore how ScotPac funded the complex turnaround and restructure of Ovato, a 150 year old printing and distribution company.
Ovato found themselves in a perfect storm with declining revenue from its traditional print market, disruption caused by the COVID-19 pandemic and ongoing losses incurred by the group over the past few years.
This resulted in excess capacity in Ovato’s print operations, mainly in staff numbers and physical print sites. The business faced additional challenges in onerous leases, high costs of redundancy entitlements and significant level of maturing debt, leading them to implement a restructure to recapitalize the business.
ScotPac Business Finance played a critical role in refinancing two major secured creditors and provided circa $70M in Invoice Finance and Asset Finance.
The benefit of using working capital solutions from ScotPac is that we take real time to understand how a business works. We dive deep in to operations to make sure we’re not missing any opportunities to provide a business with access to capital using their business assets as security. We also look forward rather than backwards, being a secured lender we focus on the value of the assets and provide the facilities against these. Ovato’s turnaround also involved the negotiated alignment of 10+ stakeholders including 333 Capital and Ashurst, as we all worked with trade creditors, insurers, banks and ASIC to make this restructure a success.
The result of this well engineered restructure will allow one of Australia’s largest printing groups to return to profitability, but also resulted in saving 900 jobs. No matter the size of a company, our aim is to give business owners and their employees the best chance of success. We hope to continue partnering with any businesses in need of a turnaround solution, so we can make the same positive impact in their lives as we did with the employees and partners of Ovato.