High Growth Manufacturer with Significant Financing Issues
Challenge
Fast growing, $100 million process manufacturer of a commodity product for high demand large retail customers. CFO and controller were no longer with the company. The company had recently defaulted on a financial covenant of its asset-based lender and had large capital equipment financing needs to meet customer demand. The company also needed to refinance its shareholder owned manufacturing facility due to a non-renewal notification of its second mortgage by its banks. The first mortgage, held by the same banks, was subject to a development bond with prepayment penalties.
Solution
Interviewed management and staff, analyzed the situation with the owner and agreed on next steps for accounting operations.
Hired a controller with manufacturing background and experience with company’s ERP system.
Managed audit with new CPA firm.
Met with line of credit bank officer and reviewed extensive covenant and weekly, monthly, and annual reporting requirements. All reporting requirements were met and established good rapport with loan officer.
Negotiated $4 million of capital leases with lease financing company for acquisition of new machinery to service growth.
Successfully sourced and negotiated refinancing of the manufacturing facility with a new bank to consolidate the first and second mortgages and provide added capital to owner within a six-week period to avoid prepayment penalties.
Negotiated an additional $3 million equipment financing line with conversion to a five year term with the main ABL lender.
Successfully managed and negotiated a $30 million line of credit and term financing with new primary lender to replace ABL lender at a lower interest rate and significantly reduced reporting requirements.
Prepared projections and managed information flow and contact with investment bankers to consider potential for sale of the company.
Transitioned new full-time CFO as part of a planned process to build a long-term management team.