Citrico owned and operated businesses connected with products derived from citrus fruit, including juice and pectin production.
The company was in default of its loan covenants, raising doubts about its viability as a going concern. In addition, a dispute arose between the joint venture (“JV”) partners, which resulted in one of the JV partners threatening to put the parent company into a Chapter 11 process, pursuant to the US Bankruptcy Code. This would have left management in control of the company.
KRyS Global was appointed by the Grand Court of the Cayman Islands, initially as provisional liquidator and subsequently as official liquidator, to preserve value in Citrico’s underlying assets and to convert the assets to cash.
KRyS Global conducted an analysis of the company’s assets and identified ways to improve its financial position and execute a sale of the assets.
KRyS Global secured significant funding to meet working capital requirements while a sale of the viable assets was pursued. A data room was established for interested party due diligence requests and an international competitive tender process was pursued to identify prospective purchasers. Over the course of a seven week period, formal bids were received from five interested parties and the liquidators negotiated with the parties who had submitted the three most attractive bids.
A sale was ultimately completed ensuring the survival of the business as a going concern and maximisation of the recovery for creditors.
By securing funding to maintain Citrico’s operations as a going concern, KRyS Global was able to negotiate a sale of the business for a value greater than originally expected and far higher than would have been achieved on closure of the business and a forced sale of the assets.
Additional asset recoveries were also made, and the ultimate result was a distribution of almost 30 cents on the dollar – more than three times original estimates.