Use cases

Take Over Funding due to Shift in Bank Credit Policy

A helicopter transport company, mainly serving corporate clients in the oil and gas sector, traditionally financed its fleet through loans and leases from bank-related funders. Due to ESG regulations, these funders are now required to reduce their exposure and cease funding the helicopter fleet. 

Helicopters are assets with a lifespan of over 25 years and must adhere to strict maintenance programs. The company approached Leonardo Lease for funding via a sale and leaseback arrangement. Leonardo Lease agreed to the transaction, recognizing the aircraft's value and the robust business model. The deal was finalized in six weeks, with assistance from aeronautic law experts.

Financing of Expansion CAPEX

A cargo handling company at the port is looking to invest in a new shipping terminal. The current banker views the project positively, contingent upon a substantial equity contribution from the company. However, the shareholder is unable to quickly mobilize the necessary funds and wishes to avoid dilution of their ownership stake. The company possesses numerous cranes that are nearly fully depreciated for accounting purposes but still have a considerable remaining useful life. 

By engaging in a sale-and-leaseback transaction with Leonardo Lease, these cranes can be refinanced according to their market value. The funds generated from this sale-and-leaseback will be allocated to secure the required equity for the new shipping terminal investment. This transaction was successfully completed and funded within a four-week timeframe.

Financing of an Out of Policy Transaction

An inland shipping firm is looking to enhance its current barge to comply with more stringent environmental regulations. The upgrade process will take three months, during which the company will not generate any revenue. 

To finance the upgrade and cover this interim period, the company is in search of financial support. However, due to a shift in the lending policy of their primary bank, they must explore alternative options. Other financial institutions are not familiar with the company’s operations. 

The company approached Leonardo Lease. After evaluating the business situation and appraising the barge, Leonardo Lease proposed a sale-and-leaseback arrangement for the vessel. The transaction was successfully completed and funded within four weeks. Once the new engines are installed, the vessel will be back in operation post-upgrade.

Financing of a Management Buyout

A management buyout is taking place at a company that specializes in engineering plastics. This company possesses a considerable number of extrusion machines that still have a long remaining economic lifespan. Although management has secured support from a venture capitalist, they aim to limit this equity contribution to prevent dilution of ownership. 

Traditional banks are only prepared to finance a portion of the buyout. To cover the remaining financing needs, a solution is established with Leonardo Lease through a sale-and-leaseback arrangement for the extruders. A comprehensive business case analysis is conducted with the assistance of a financial expert, who also facilitates a detailed valuation of the extruders by a qualified appraiser. Following this thorough evaluation, Leonardo Lease agrees to lease the machines at 80% of their market value.

Improving Liquidity Position

A manufacturing firm operates within a sector characterized by relatively unstable commodity prices. Historically, the company has managed to navigate this volatility by maintaining a strong cash reserve, enabling it to engage in anti-cyclical purchasing. However, following a significant investment in expansion of the production capacity, the company has turned to long-term financing from its established banking partners, and resulted in a substantial decrease in its cash reserves. 

This situation hampers its ability to pursue an anti-cyclical strategy, temporarily. The firm possesses a considerable number of fully depreciated machines that still have a lengthy economic lifespan. Following a comprehensive valuation conducted by a qualified appraiser, Leonardo Lease has expressed interest in refinancing these machines through a sale and leaseback arrangement at 70% of their market value. 

This approach will help the company restore its diminished liquidity to historical levels by leveraging the latent value of its assets, allowing it to maintain its anti-cyclical inventory strategy. Additionally, the enhanced production capacity will enable the company to manage the staggered financing obligations associated with the sale and leaseback without compromising its liquidity.

Financing Project  Specific CAPEX

A hydraulic engineering company has a team of divers engaged in a subcontract for the building of an underwater pipeline, which requires a workboat. The firm is considering the acquisition of a used workboat that meets the project's specifications. The cash flow generated from this project is allocated to repay the investment in the workboat. 

Nonetheless, this financial commitment significantly affects the company's financial structure, causing conventional banks to be reluctant in offering financing, as they typically concentrate on supporting only working capital requirements. As a result, the company contacted Leonardo Lease. Following a comprehensive evaluation of the business case and the workboat's value, the deal was successfully concluded, with payment processed within six weeks.