Recycled Paper Pulp Manufacturer
Industry:Manufacturing & Processing
Service:Chief Restructuring Officer
Company:Manufacturer of Recycled Paper Pulp
As a result of the significant decline in business from its largest customer, a manufacturer and distributor of recycled paper pulp experienced a serious decline in revenues and margin, incurred significant operating losses and substantial negative cash flow. As a result, the Company was not able to keep its trade debt current or make any interest and/or principal payments on its senior secured debt.
The Company, on the advice of its senior secured lender, engaged Focus Management Group to perform a detailed situation analysis.
- Performed the financial and operational reviews necessary to develop an overall assessment of the Company
- Prepared an updated situation analysis which revealed that the Company’s revenues had suffered a substantial loss due to further cutbacks and slowdown in business of the Company’s customers. This loss in sales revenue made it impossible for the Company to operate in the ordinary course.
- Developed an action plan to right size the Company’s operations and a restructuring plan for the Company’s debt service obligations and presented these this plans to stakeholders
- As a result of Focus’ guidance, the Company and its senior secured lender negotiated several forbearance arrangements. The Company rapidly recovered from its revenue decline and successfully sustained its operations over several quarters.
- Focus was engaged as Chief Restructuring Officer to operate the Company through an orderly shutdown, possible sale of the business, or a possible restructuring.
- As CRO, Focus evaluated the Company’s options, negotiated with key stakeholders, including the Company’s secured lender, to obtain funding needed to complete the different courses of action and conducted a private sale process with financial and strategic buyers.
- Focus successfully negotiated and closed on a sale of the business to a strategic buyer at a price that was satisfactory to the various stakeholders.