Friday, February 25, 2011

On behalf of a syndicate of lenders...

On behalf of a syndicate of lenders GoIndustry DoveBid was recently asked to value a large fleet of construction equipment, located in the Middle East.        The scope of the valuation was to inspect a sample of the assets, collect detail on the condition of these units, to provide current market values for both a solvent and insolvent 12 month exit scenario and finally,  to provide future values over the next 4 years. 

We inspected the equipment at 5 different sites, and using a using a pre-defined inspection form to gather our evidence we scored factors such as tyre condition general condition of equipment and we collected information on hours and attachment.  During our time on site we observed over 27% of the total fleet.

The funded portion of the fleet was all from a single manufacturer and under 5 years old.  The majority of the market evidence available to us referred to equipment in the region of 10-15 years old, and any comparable ages of equipment did not correspond to a traditional depreciation profile based on the age alone.  Therefore, using adjusted logarithmic trend lines from the market evidence, we produced depreciation profiles based on unit hours rather than age

We also estimated the hours on none inspected units using the company’s latest recorded hours, then we increased these by the average observed difference per model type.  Future hours were calculated assuming a reducing hourly use per year.  The tyre condition of none inspected items was also estimated and based on observed models and factored into the values as either uplift or write down based on the variation from the mean tyre condition.  We also took account of tyre brand tier, fleet size, general condition and the local market.  Depreciation profiles were produced for each model, and market evidence profiles were provided for the major models in the fleet.

The in depth analysis provided detailed information of the fleet both for the current values and based on realistic future conditions that took into account the relevant variables to value the none observed portion of the fleet.

For more information on services which GoIndustry DoveBid can offer please go to our website,

Wednesday, February 16, 2011

Metal, Metal Everywhere

GoIndustry Dovebid was recently engaged by an Asset Based Lender (ABL) to reappraise a large independent metal stockholder.   Following a successful implementation of an inventory facility back in 2009, the lender required a reappraisal given the fluctuations seen of late within the metal market prices.

The company operated out of 12 regional centres located throughout the UK, which together with circa £12m of inventory and over 44,000 sku’s, the level of analysis was considerable. 

Retention of Title was a key area of focus, complicated further by a well spread supplier base.  50 suppliers terms and conditions of sale were reviewed and appropriate reserves applied in order to assess and quantify the ROT reserve. 

The Company performed well since our last visit given great pressures economically seen within the UK over the last couple of years.  Our valuation was broadly in line with our prior visit, albeit slightly lower, reported within agreed timescales and employed 3 valuation team members.

For more information on the work which GoIndustry DoveBid completes please go to our website