Background

Renal Services (UK) Limited, an ‘away-from-hospital’ care provider operating 20 state-of-the-art dialysis units across the UK to over 1,000 NHS patients was looking to refinance and upscale its current debt facilities, following a significant period of successful contract tender awards to increase the size of the clinic portfolio by 60% over the next six to nine months.

Given the scale and speed of growth and the implied financing requirement, FRP was engaged to source a competitive financing package that would enable the business to fully fund new clinic construction and fit-out with appropriate operating headroom. The package needed to use debt finance with limited draw down restrictions, and avoid undue covenant challenges, due to the rapid nature of the new opening programme.

Action

The Debt Advisory team ran a competitive refinancing process that would fully support immediate capex requirements, while also providing access to further incremental funding capacity in the future, should the growth trajectory continue or accelerate with new tender opportunities on the horizon.

We were heavily involved in developing marketing materials to explain the strength of the credit, and the quality of Renal Services’ income stream. We negotiated specific covenant flexibility in the first 12 months of the deal to provide adequate operational headroom, through a combination of drawn term debt, a committed (but undrawn) capex facility, a confidential invoice discounting (CID) line to support short-term working capital requirements, and an equipment finance line to support the acquisition of relevant dialysis equipment.

Outcome

Our team secured highly cost-competitive terms from the Regional Debt Finance department at a major UK bank, delivering a one-stop financing structure that would allow Renal Services to achieve its short-term clinic opening programme, but also access incremental funding after the first 12 months to continue its growth story. Given specific pinch points within the first nine months, we were also instrumental in securing specific covenant headroom and one-off flexibility, to ensure the immediate clinic opening programme could be delivered on time.