Case Study

Financial Advisory

Oil Field Manufacturer

THE FIRE

A long-established oil field manufacturing company experienced rapid sales decline during the energy downturn in 2015-2017.

Manufacturer could not service debt and experienced daily operational liquidity constraints.

Existing inventory valuation and borrowing base reserves were irregular.

High-level accounting (CFO) capabilities did not exist.

THE RESCUE

Performed a workout on behalf of the secured creditor of $15 million in revolving and term loans.

Developed and advised on procedures to improve daily borrowing base reporting.

Successfully negotiated eased terms on the revolving line of credit that allowed the company to borrow against more of its inventory and monthly loan amortization was reduced. 

THE RESULT

The company’s liquidity improved significantly.

Principal payments were restored upward toward the original monthly amortization level and the revolver availability was reduced.

Over a three-year period the financial condition improved sufficiently to pay off the term loan in full and refinance the revolving line at market levels.