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Eldim #2

presented by October France

€2,000,000

3.9%

24 months

A

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location

Location

Hérouville-Saint-Clair, France

activity

Activity

Marketing surveys & consulting

Presentation of the company

Created in 1991, Eldim is active in the optical technology sector. The company, managed by Thierry Leroux, has 30 employees and is based in Herouville Saint Clair.

The company is specialized in display and metrology technologies. Eldim is mainly known for its screen angle metrology systems (TV, monitors, tablets, smartphones, etc.).

Eldim works with about twenty customers in the technological field.

For more than 10 years, the company has been working with Apple and has participated in the development of the facial recognition system on the iphone X released in late 2018.

Project Description

In the frame of the development of their partnership with their main clients, the company requests a loan of 2 000 000 € over 24 months with 6 months of deferred repayment to finance a stock of raw material (to be transformed) designed to manufcture new optic control machine. This project will be realised next month.

As a reminder, the October lending community supported ELDIM in 2017 with              1 040 000 € to finance the purchase of a raw material stock necessary for the manufacture of control equipment as part of a contract of 11 000 000 € with its main customer.

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 a medium-term loan with a capital amortisation deferment and as such presents a different method of capital repayment than standard projects. The first 6 months, the lenders will only receive interest; the following 18 months, the lenders will receive interest and principal amortization. This principal repayment profile matches the borrower’s financing needs while allowing lenders to earn a higher amount of interest.

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

Analyst’s Opinion

With a turnover of 14 822 000 € in 2018 and an experienced team, the company has a good track record combined with a two-digits operating margin.

In 2018, the increase in turnover is linked to the execution of the €11 million contract with the main customer.

The 2019 budget foresees a decrease in turnover to €10 million due to a postponed order. The order book shows a forecast turnover of €44 million in 2020.

The forecast is based on the historical performance.

The borrower has a solid repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,7 and a strong financial structure, with a forecast net debt / ebitda ratio of 1,8 and a net debt / shareholder equity of 94%.

The analysis of the project leads to a credit rating of A and a 3,9% annual interest rate.

*The multiple of FCCR at 1,7 means that the company has a safety margin of 70% 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 (External data provider). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

  • Good historical performance based on diversified client base.
  • Solid repayment ability with a forecasted FCCR of 1,7 reinforced by the support of banking pool.
  • Experienced company specialized in a specific market.

Points of caution:

  • Customer dependency.
  • Constant requirement for high technical performance.