C.M.D. Costruzioni Motori Diesel

Presentation of the company

Created in 1991, C.M.D. Costruzioni Motori Diesel S.p.A. is active in the mechanical components sector. The company, managed by Mariano Negri, has 119 employees and is based in Atella. In 2017 Loncin Motor Co. Ltd, a Chinese listed multinational, acquired 67% of CMD.

The company’s main activities are:

• Development and manufacturing of diesel and gasoline engines for automotive, marine, cogeneration and aviation segments;
• Mechanical processing on automotive engines for third-party;

The company works with a well estabilished client base, for the automotive business with an historical relationship with FCA and FPT.

The Company has recently approved the business plan to 2021 that consider to launch new engines for light aviation.

The investment plan for the aviation segment development is fully supported by the Chinese shareholder.

Project Description

The company wishes to borrow 2 000 000 € over 30 months with 6 months of deferred repayment to finance part of the investment plan, which includes new production plant, machineries and equipment. This project will be realised by the end of the year.

This project is a Flexible Bridge Loan, an amortizable loan with a standard commitment for the first 9 months and the possibility of early repayment at no cost for the remainder of the loan term, even in the event of refinancing by other financial institutions.

This project is not covered by the Italian state guarantee.

The amount offered on the platform is limited to € 980 000, in line with regulatory limits.

Like all projects presented to private lenders on Lendix, it is co-financed with institutional investors, sophisticated investors and the management of Lendix, subscribers to the Lendix Fund.

Analyst’s Opinion

With a turnover of 31 921 000 € in 2017 and an experienced team, the company has a good track record combined with a two-digits operating margin.

Turnover growth is mainly driven by the new product developed. The forecast is based on the performance registered in 2017 and on the Company business plan.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,27 and a good financial structure, with a forecast net debt / ebitda ratio of 1,47 and a net debt / shareholder equity of 23%.

Considering as equity the non-repayable funds from Basilicata Region and the portion of debt that will be amortized after Lendix loan maturity.

The analysis of the project leads to a credit rating of B+ and a 4,5% annual interest rate.

Strong Points:

• Good historical performance based on diversified client base;
• Good repayment ability with a forecasted FCCR of 1,27;
• Historic company with know how and expertise, investing in R&D and innovation.

Points of vigilence:

• Delay in the development of new products in the aviation division.

*The multiple of FCCR at 1,27 means that the company has a safety margin of 27 % relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (ModeFinance, Crif, Cerved). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.