A $400 million diversified energy company ran into a cash crunch and tripped several covenants on loans with a large regional bank. The lender gave the company several Turnaround Management Firms to choose from to help it to better understand and manage its cash flow and needs. While the case appeared to be a straight forward financial case, the CEO of the company thought that poor marketing and sales were at the heart of the his company’s problems. Moreover, the CEO was disproportionately concerned with a $3 million consumer entertainment subsidiary at the company. Given the CEO’s concerns, the company chose the only Turnaround Management Firm that it interviewed that offered consumer and business to business sales and marketing advisory services.
- The Client – A $400 million diversified energy company
- The Lender – A large regional US bank
- The Turnaround Management Firm – One of the TMA industry’s “Finest”
- Michael Roth Advisors (MRA)
- The client received a cash, operating and financial plan that immediately stabilized its operations and served as the basis for it reestablishing the confidence of its lender. It also received a multi-point marketing and sales plan that demonstrated that there were several viable growth plans available for it to deploy without the need for additional spending. Most importantly for the CEO, the company received a specific sales and marketing plan for its $3 million subsidiary. A subsidiary which was less than 1% of total company revenues.
- The lender received the assurances that it needed on the debtor and extended the forbearance period with the company until it could fully implement its plans.
- The Turnaround Management Firm won a very competitive case and saw the case extend into an additional sales and marketing planning and implementation project.
- Michael Roth Advisors again demonstrated that it could help multiple constituencies to benefit from growth related planning and value generation.