Case Studies
EV Engineering and Manufacturing Company Sector
Industrial & Manufacturing Services

SOLUTION
- Founded in the 1960s, Geico (the “Company”) has become a world leader in design and development of customizable turnkey automated automotive production line solutions offering flexible and creative services for any project type
- The Company was awarded a $125 MM contract (the “Project”) with a world renown automotive manufacturer (“OEM”). The Company would serve as the general contractor and has reduced its performance risk by sub-contracting the project to a Fortune 500 company as well as a leading provider of assembly line application technology
- In order to begin the Project, the OEM requested a sizable down payment from the Company. However, the OEM required a guarantee of contract completion prior to making the down payment
- This posed a problem for the Company as it was operating within under a moratorium due to over-leverage (close to 10x) and razor-thin equity value and thus did not have its normal bonding lines available with its existing bank-syndicate (10+ banks)
- Chiron Financial was retained as the investment bank to assist in obtaining an instrument and structure that would satisfy the Project guarantee requirements by the EPC Customer
OUTCOME
- Chiron successfully arranged a $67.5 MM advance payment surety bond through a strategic partner which was to be used as the Project guarantee; however, the OEM was unfamiliar with the surety bond and instead required the more commercial, advance bank guarantee – which was impossible for the Company to obtain due to the constraints of its moratorium agreement
- Chiron marketed the surety bond as collateral to secure the advance bank guarantee to multiple local banks, but all were unfamiliar with the proposed structure and declined the opportunity
- As a result, Chiron marketed the opportunity to many international capital providers, received multiple advance bank guarantee term sheets structured as a fronting guarantee backstopped by a surety bond, successfully negotiated to obtain the best terms for the Company, and assisted with the diligence process
- The OEM at this point incurred budget overruns and consequently paused the project until 2025
The Challenge
The Company was awarded a $125 MM contract (the “Project”) with a world renown automotive manufacturer (“OEM”). The Company would serve as the general contractor and has reduced its performance risk by sub-contracting the project to a Fortune 500 company as well as a leading provider of assembly line application technology. •In order to begin the Project, the OEM requested a sizable down payment from the Company. However, the OEM required a guarantee of contract completion prior to making the down payment. This posed a problem for the Company as it was operating within under a moratorium due to over-leverage.
The Chiron Solution
Chiron Financial was retained as the investment bank to assist in obtaining an instrument and structure that would satisfy the Project guarantee requirements by the EPC Customer
The Result
Chiron marketed the opportunity to many international capital providers, received multiple advance bank guarantee term sheets structured as a fronting guarantee backstopped by a surety bond, successfully negotiated to obtain the best terms for the Company, and assisted with the diligence process