Teletouch was facing multiple challenges: Thermo Credit LLC (“Thermo”), its senior lender, had informed the Company of its desire to exit the current loan facility early and that it could no longer lend additional working capital. This situation created related difficulties with the Company’s mortgage lenders. Teletouch was also in the midst of an ongoing settlement discussion related to outstanding state sales tax liabilities. Meanwhile, the Company was in the early stages of transitioning its business from its legacy business as a leading Authorized Service Provider and billing agent of AT&T to a wholesale distributor of cellular products. The confluence of these factors rendered the refinancing of the Thermo facility very challenging.
BPC worked with Teletouch to identify and accurately position all of its assets that could serve as collateral to a new lender, including traditional assets such as account receivable and inventory, as well as non-traditional assets such as the value of its AT&T subscriber base. BPC reached out to its wide network of non-bank lenders, which would be more receptive to this non-traditional type of loan. BPC assisted Teletouch in negotiations with the potential lenders and during the due diligence process. In addition, BPC took the lead in negotiating with Thermo a resolution to the matter, which involved a restructuring and partial re-payment of the Thermo facility.
Teletouch entered into a new, two-year, $6 million senior secured asset-based revolving credit facility (the “Revolver”), such facility also providing for an additional multiple use, short term loan facility of up to $2 million per loan for special order inventory purchase transactions (the “Term Loans”). Initially funded proceeds from the financing were used to make a partial repayment of the existing senior credit facilities, with Thermo agreeing to a new three-year Subordinated Promissory Note for the remainder. These new credit facilities also enabled the Company to make progress in resolving the challenges with its mortgage lenders and the state sales tax issue.
“BPC provided truly full-service investment banking throughout the financing process. They identified a strong financial partner, assisted us in negotiating the initial term sheet, supported the due diligence process and ultimately the final transaction documentation. In addition, BPC assisted in negotiating a solution with our existing creditor. The BPC team was a pleasure to work with and integral to bringing all aspects of this transaction to a conclusion.”