Prism distributes specialty construction materials used in road and infrastructure projects across Southeast Asia. The business grew fast as government road spending rose, and the company funded much of that growth with debt from banks, financing companies and private lenders.
Before deciding what to do next, the shareholders needed a reliable picture of where the company actually stood.
Prism had built a solid distribution business. Its materials were going into road and infrastructure projects across its market, demand was there, and the company had expanded quickly. It had borrowed to pay for that expansion, but the record-keeping never caught up. The company’s own record of what it owed was split between a loan tracker kept by hand, contracts filed in different places, and three separate payment accounts, and none of them agreed with the others.
The loan repayments had grown to take more cash than the business was bringing in, and something had to change. The shareholders could put in money to cover the shortfall, restructure the debt, or wind the company down. They had different views on which route to take, and there was no shared set of facts to settle the question. Each option depended on numbers that nobody was sure of. So they brought in Alehar to go back to the beginning and establish what the company owed, what it held, and whether it could repay.
We started with the debt, because every other question depended on it. We worked from the signed loan agreements, the restructuring documents and lender schedules, the company’s own loan tracker, and the payments showing in the bank records. From those we rebuilt the borrowing position one facility at a time, covering lender, balance, interest rate, repayment schedule and security. Every line carries a verification status, so it is always clear which figures come from a signed document and which come only from the company’s own records.
That gave the shareholders a single schedule of every loan, which they could challenge line by line. Where the contracts, the tracker and the actual payments disagreed, we listed the differences and took each one back to the company. Anything we could not back with a document was marked as an open question rather than treated as fact. That loan schedule became the starting point for everything that followed.
At the same time we rebuilt the cash record. We pulled the bank statements into ledgers covering several years of activity, checked every running balance, and matched them line by line against the company’s own day-to-day payment records. We also put the company’s payment platform alongside the two bank accounts, so all three could be seen side by side each month. For receivables and payables, we checked each source and used the records kept at the time rather than summaries written later.
That meant what the company held and what it spent could be shown from records instead of argued about. We could measure debt service across all three accounts at once rather than one at a time. We could check collections against the sales the company believed it had made. And we could state the monthly cost of running the business with evidence behind it.
After cleaning and establishing the debt and cash records, we built a month-by-month forecast of cash in and cash out, including the repayment schedule. Three things decided whether the company could repay: how much of the sales pipeline converted into real orders and when, whether the product could be bought locally at a lower cost and how soon, and how much room there was to renegotiate repayment terms with lenders. We tested the forecast under a different combination of assumptions for each of the three factors, which showed that the size of the debt was only part of the question.
Since the shareholders had different views, we did not tell them what to do. We showed them what would have to be true across the three factors for the debt to be repaid, and how realistic we thought that was. We presented the analysis to the full shareholder group, and by the end of the session the conversation had moved from the size of the debt to the drivers that decide whether it can be repaid.
Prism’s shareholders now share a clear, common view of where the company stands: what is owed, to whom, and when, and what has to happen for the business to repay it. Every figure can be traced to a bank record or a signed document.
The shareholders are now weighing the path forward on that basis. The demand, the product and the position in the market were built by the company. Alehar’s role was to establish the facts clearly enough for its owners to decide what comes next.
Tell us what you're working on. We'll tell you how we'd approach it. We respond within 24 hours.
Perspectives on corporate finance, fundraising, and M&A, from the Alehar team.
