Business Capital Serves as Sole Lead Arranger for Combination $15MM Debtor-in-Possession & 363 Acquisition Financing for Pacific Steel Casting
“Business Capital came through for Pacific Steel when we were at a critical juncture; they augmented my staff by aggregating and managing a significant number of funding sources. We benefited greatly from their capability to underwrite our credit through the eyes of a credit committee, which resulted in a fluid refinancing process for Pacific Steel.” -Chuck Bridges, COO, Pacific Steel Casting
The client, Pacific Steel Casting (PSC), is one of the largest independent steel casting companies in the U.S. that makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. PSC, a major employer based in Berkeley, CA since 1934, is in its fourth generation of ownership.
After a government audit forced the company to layoff nearly 200 undocumented workers and pay heavy fines, PSC struggled to replace workers while incurring higher workers compensation insurance premiums and significant additional costs associated with settling an employee class-action lawsuit related to the timing of lunch breaks. The company recently filed for Chapter 11 bankruptcy protection to enable it to restructure its liabilities and remain in operation.
Business Capital was referred in by Pacific Steel’s prior lender and served as the sole lead arranger to secure new financing. The team was able to understand and present the merits of the company’s situation (reorganization or sale of the company) which was critical in getting the immediate working capital needed to support ongoing operations and maintain vendor and customer confidence during the Chapter 11 proceedings. The new financing will ensure a seamless transition into the next phase of PSC’s opportunities.
“We are so pleased to have secured this credit facility for Pacific Steel. PSC’s long time employees, suppliers and customers are the company’s number one concern and this new financing will ensure a seamless transition into the next phase of Pacific Steel Casting’s opportunities. We were able to understand and present the merits of the company’s situation, reorganization or sale of the company, which was critical in getting the immediate working capital needed to support ongoing operations and maintain vendor and customer confidence during the Chapter 11 proceedings.”- Chuck Doyle, Managing Director, Business Capital