NATURE OF ASSIGNMENT:
Primary: Lender - Creditor Services / Cash Flow Performance
Primary Industry: Distribution & Logistics
Company: $150 million manufacturer and distributor of tow trucks
Situation: A vertically-integrated manufacturer and distributor of tow trucks was struggling to improve cash flow and correct a loan default situation.
Focus Scope: Focus was approached by a bank group to provide crisis management assistance, and to assess the Company’s operations and finances with a view to identifying a plan to generate cash and amortize debt.
Tasks Performed: Focus’ three week intensive review culminated in the ratification of the Company’s plan to continue to divest itself of non-core businesses (including the spin-off of its nationwide distribution and recovery centers), the capacity rationalization of its USA manufacturing plants, the identification of cash generating opportunities of $58 million arising from both asset sales and operating cost control measures, and the establishment of a detailed plan setting out timelines and responsibilities for the attainment of the goals.
Results: As a result of the implementation of Focus’ recommendations, the Company successfully paid down its debt burden by over $50 million over an eight month period, and ultimately was able to enter into a refinancing that provided the incumbent bank group with a 100% payout.