NATURE OF ASSIGNMENT:
Primary: Lender Services - Business Viability Assessment
Primary Industry: Energy
Company: Oil & Gas Equipment & Services Company
Situation: An oil and gas equipment and services Company was formed upon the completion of a highly leveraged roll up of 3 separate companies into public shell entity. Almost immediately after inception, all of the Company’s operations experienced a sharp decline in revenues due to market conditions. The Company defaulted on its debt covenants with its Lender, resulting in the Lender being faced with the decision to approve overadvances on revolver debt or allow the Company to go out of business.
Focus Scope: Focus Management Group was engaged to perform a situation analysis on behalf of the Lender.
Tasks Performed:
- Analyzed and evaluated Company’s business model and assessed Company’s financial projection and cash flow forecast for reasonableness and attainability
- Reviewed cost control initiatives already undertaken by the Company and determined opportunities for efficiency improvement and additional cost rationalization
- Assisted the Company in developing and enhancing its liquidity
- Assisted the Company in the hiring of a CFO/Controller
Results:
Focus’ involvement resulted in the Company turning around annualized EBITDA performance within a nine month timeframe from negative $2.0 million to positive $1.5 million, bringing its loan facility back into compliance in the process.