Fifteen years ago, Gaëtan du Halgouët and Thibaut Robet founded Chateaudun Crédit, a French specialist in factoring advisory. They share with us their experience of restructuring situations.
Décideurs: What led you to launch a factoring advisory firm?
Thibaut Robet: Negotiating a factoring agreement is complex and its implementation is highly technical. Unlike traditional bank loans, factoring has an impact on a company’s organization. The financing it generates depends on multiple parameters such as customer risk, payment terms, invoicing methods, collection processes, and the nature of contracts linking the company to its clients. In 2005, to help companies address these challenges, we decided to create the first advisory firm specialized in factoring.
Where does Chateaudun Crédit stand today?
Gaëtan du Halgouët: Today, our team of 35 employees supports more than 1,000 French and international clients, helping them negotiate, implement, and optimize their receivables financing or inventory financing. These financings represent around €6 billion. Over the years, we have developed the expertise and tools necessary to ensure the success of our clients’ factoring and inventory financing projects.
T.R.: In June 2018, we acquired Cetrafact, a software solution for managing factoring operations. The development and integration of this software at client level is led by a team of ten consultants and developers. Cetrafact is growing strongly and is recruiting four additional employees. It is a major asset for our clients.
“Our role is to help our clients choose the right partner.”
You often work with companies in restructuring. What are the main challenges in these situations?
G.H.: The most important factors are often urgency and the size of the financing obtained. If a factoring agreement already exists, we assess whether additional funding can be secured with the existing provider, or whether a new factor must be found quickly. In restructuring situations, factoring companies do not all react the same way: some support the company, others restrict financing, and some exit altogether. Our role is to help clients choose the right partner. In restructuring contexts, financial management is under significant pressure. We ensure that, despite the difficult situation, the company is not forced into a financing strategy dictated by its environment and can make an informed, objective decision.
T.R.: Indeed, banks at the negotiating table often try to impose their own factoring subsidiaries. However, choosing a factor is a highly structuring decision. Using our services allows companies to create competition among market players to obtain the best offer, while shifting pressure away from banks toward a third party over which they have less control. In amicable procedures, this gives companies a very effective negotiating lever with creditors.
Can you give examples of solutions adapted to restructuring contexts?
G.H.: We recently supported a French automotive equipment supplier employing 600 people. This subsidiary of a U.S. group could no longer cope with the sharp decline in activity during the lockdown and entered insolvency proceedings. As is often the case, the company already had a factor, a subsidiary of one of its banking partners. Our initial mission was to urgently secure a new factor to prevent any interruption in financing during the observation period. We then quickly set up a new factoring agreement for the “NewCo” that acquired the assets through a court-approved sale plan.
T.R.: We also supported a company in the oil services sector during the acquisition of its French drilling activity from a large group. As this activity was highly loss-making, we had to convince a factor to support the turnaround project while negotiating competitive terms. Given the volatility of the oil sector, we also had to work closely with credit insurers to secure sufficient coverage for the company’s clients and thus enable receivables financing by the factor.
G.H.: These examples show that we are not just negotiators. We manage the entire project. Many skills are required to implement a factoring program: legal, IT, negotiation, and more. Our role is to coordinate operations with management teams, internal departments, factors, credit insurers, and all stakeholders, often under tight deadlines.
T.R.: Companies in turnaround situations, their shareholders, or advisors rely on us for our ability to assess available options, recommend concrete solutions, and implement action plans. Our deep knowledge of factoring players and our ability to engage in urgent negotiations allow us to secure the best possible terms.
What is your positioning in this market?
T.R.: Initially, our work focused on assessing financing potential and negotiating conditions with factors. Over time, it expanded to include all stages of the project: contract negotiation and review, coordination with legal advisors and auditors, technical implementation, and ongoing contract management through our software. We also support companies throughout the entire lifecycle of their factoring programs. In addition, with Haro, our inventory financing company, we help firms obtain additional financing using stock as collateral.
“We are not just negotiators. We manage the entire project.”
Why did you create Haro in 2010?
T.R.: Haro was created to expand our factoring advisory activity into another key component of working capital: inventory. With Haro, we strengthened our national coverage with five regional offices. Haro has become the second-largest player in its market and offers an innovative alternative to traditional inventory pledge practices.
What is Haro’s contribution to inventory financing?
T.R.: We observed that the inventory financing market was growing steadily but had few players and little innovation. We developed a new approach to auditing and valuing stock to increase security for banks. We also created an online platform, “mongage.com,” to automate and digitize exchanges between companies, Haro, and banks. This collaborative web platform enables continuous monitoring and valuation of stock. It manages legal documentation, audit reports, and stock performance indicators, providing more security, services, and simplicity to all stakeholders.