Profit Improvements Facilitates Refinancing

Cocoa Services, LLC

Swedesboro, New Jersey

Challenge

$3 million Cocoa Product Distribution. $6 million of Term Debt and $2 million Real Estate Debt. Company had operated as a joint venture for 20 years. Owners each required to loan $3.5 million to the venture


  • Company invested in the construction of a cocoa deodorizer at a cost of $13 million.
  • Company was $2.4 million over budget and 6 months delayed with a projected $1.1 million of start-up expenses required.
  • Company operations had been low tech and basic. New operation was highly technological and quite complex.
  • Company had historical revenue of $2.5 million with $.5 million in EBITDA.
  • Projections were for Revenue to Increase to $5.5 million.
  • Bank had lost confidence in Ownership due to missed projections and cost overruns.
  • One owner had $22 million in outstanding real estate debt outside company with current bank.
  • Joint Venture Partners not agreeing on the direction of the company and had very caustic relationship.
  • Start-up issues resulted in losses in the first 2 months of operations.

Solution

  • Worked with Senior Management to identify causes of excessive start-up costs and assisted in containing the costs.
  • Worked with Management to identify needs of company for long term success.
  • Created 2 year Financial Projections to help bank better understand the long term outlook of the company.

Results

  • Company quickly turned profitable and was realizing $200K/month of EBITDA.
  • Presentation and analysis helped find refinancing of current loans.
  • Acted as an independent voice for to joint venture and communicated plans with both groups.
  • Acted as an independent voice to banker. Kept bank apprised of situation to gain confidence in restructuring plan.