|
>> Read about next Case Study >>
Company
A $12 million manufacturer of products for the cosmetic industry.
Services Provided
Turnaround and Crisis Management
Situation
The company was in a significant over-advance position on its line of credit facility. Its forbearance
agreement was set to expire in sixty (60) days. Operations were cash flow negative. Additionally, the
company faced a large Industrial Development bond payment due one (1) day prior to the forbearance
agreement expiration date. The company had recently lost one of its largest customers to foreign
competition. The bank was poised to liquidate.
Our Role
As CRO and interim CFO we implemented cost reductions, and structured new management tools and
incentive packages. We managed trade vendors and daily cash requirements. We negotiated and
implemented a payment plan with trade creditors.
Result
A thorough review of the balance sheet yielded significant underutilized assets which were quickly
sold. This allowed the company to meet its bond payment obligation. A multi-year trade creditor
payment plan (no interest) generated sufficient cash inflows to allow the company to meet its
obligations. The company turned cash-positive within sixty (60) days of our arrival and remained
so throughout the assignment. Our quick response to the crisis provided the necessary time to
restructure the company and allowed management to regain credibility with its creditors.
>> Read about next Case Study >>
|
