Africa-Press – Zambia. You borrow money and you misuse it. You have no assets to support the collateral needed to borrow more money and you end up defaulting on the loans you already had. The bank, in its normal process, can’t lend you any money.
You talk to your father about your issues and your father says I will take over your company and run it, and also create the managerial departments to support you.
Then you and your father go to the bank. The company is still in your name with PAcra and it shows that you defaulted already on your loans, and your balance sheet shows more liabilities than assets. But the bank knows your father’s reputation as a businessman and they approve a debt facility that will help you restructure current debts, pay outstanding debts, and refinance short term debts to give you room to breath, while you cut expenses and deal with other issues on the P&L (increase revenue and cut expenses).
With all this in mind, the debt facility is approved purely because your father is incharge and the bank trusts him. NOT BECAUSE THE FINANCIAL CONDITION OF YOUR COMPANY qualified for the debt. Simply put.. we only got the money because HH is president. THATS IT!!
I know I love this man… But I would give everything to have him run my corporation if I had a company. His key experience on this matter is “change management practitioner” where they go into companies and restructure failing companies to help them on a path for profitability. It’s the same strategy he has employed for Zambia.
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