A Metal Stampings Manufacturer serving automotive OEM and Tier I customers had experienced seven figure quarterly losses for two years.
Our client defaulted on their senior debt which caused the lender to block the availability and resulted in a misstatement issue of the $750,000 Borrowing Base (BBC). To complicate matters, the company had absentee ownership.
The client’s board and shareholders enlisted the help of Cascade Partners’ Restructuring Team as financial advisor to help develop a turnaround plan. We completed a 13-week cash flow and was able to correct the BBC issue in just two weeks and negotiated a Forbearance Agreement providing more time. We conducted extensive assessments of operations and cost accounting and identified pricing as a major issue. We took action and contacted their biggest customer and were able to execute an Accommodation Agreement that included competitive price increases and established progress milestones. With the company once again profitable, the shareholders determined that a “going concern” sale was the optimal choice.
The Cascade Advantage
Our Restructuring Team closed on a successful stock sale to a foreign strategic buyer, negotiating to ensure job security for all employees. The senior debt was fully paid off, with the senior lender now acting as the lender to the buyer. Furthermore, all trade debt was assumed by the buyer.