An industrial holding company approached Westend Bank in connection with the implementation of a corporate restructuring. The request was for the provision of a guarantee to secure a deductible from a credit insurance policy.
A financing arrangement was already issued to the holding company. At this point, a request for the provision of a guarantee for one of the group’s subsidiary companies was addressed to us.
Due to increasing competitive pressures, the group decided to sell its operating business to the market leader in its industry through an asset deal in a purchase agreement. The company is to be wound up over the next two years.
Within the framework of a credit insurance contract, the issuer of the original policy covers receivables (including bills receivable) to which the group is entitled against its customers on the basis of deliveries of goods and/or services, either directly or through the assignment of receivables. The guarantee is secured by a fixed deposit.