This is the second in a series of articles on a currently unfolding turnaround case where all major players in the case are winning – the client, the lender, the turnaround management firm and Michael Roth Advisors.
In this turnaround case, the lender was a major US based bank. And while the “at risk” loan in this case would not have made a meaningful mark on the banks’ balance sheet, it was nevertheless a high profile case for the bank and it had hit the radar screens of several key people within the bank.
The bank wanted to lower its risk profile, an assessment and plan for the borrower from a trusted, third party resource and the bank wanted out of this credit and wanted its borrower, with the help of the trusted advisor to find alternative financing.
The bank provided the borrower the names of a number of turnaround management firms that it trusted to work with the borrower. The firms on the list made it there because of their impeccable reputations for successfully helping troubled companies. The turnaround management firm that won this case is well known as being one of the finest firms in the industry, having helped hundreds of clients – direct and indirect for many years in the process of recovery.
The bank is a winner in this case due to the superb work of the turnaround firm. Within just a few weeks, the turnaround firm helped the client and the bank to:
- Develop a turnaround business plan
- Generate an accurate cash flow to better understand its working capital availability
- Develop an organizational restructuring plan and other meaningful overhead reductions
- Generate customer & product profitability analyses
- Generate a plan and process to help the client refinance its existing loan facilities
- Assist the company to value its businesses and specific assets
The bank is a winner because it now has enhanced confidence in the company’s operations, the company is continuing to meet its loan obligations and the company is well on its way to securing alternative financing.
The bank is also a winner in this case because of the contributions of Michael Roth Advisors (MRA). MRA was brought into this case by the lead Turnaround Management firm to develop a marketing and sales plan to provide a pathway to growth for the client. After the plan was submitted, the client asked MRA and the lead Turnaround Management firm to continue full time at the company. This ensured implementation and gave the bank further security as they had their trusted advisors in place on a consistent and ongoing basis.
This plan is just another example of the work that MRA does to enhance value for its multiple direct and indirect clients including companies, lenders, turnaround management firms and private equity firms.