Case Study

Oil Field Manufacturer

The Fire

  • A long-established oil field manufacturing company experienced rapid sales decline during the energy downturn in 2015-2017.
  • Manufacturer could not service debt and experienced daily operational liquidity constraints.
  • Existing inventory valuation and borrowing base reserves were irregular.
  • High-level accounting (CFO) capabilities did not exist.

The Rescue

  • Performed a workout on behalf of the secured creditor of $15 million in revolving and term loans.
  • Developed and advised on procedures to improve daily borrowing base reporting.
  • Successfully negotiated eased terms on the revolving line of credit that allowed the company to borrow against more of its inventory and monthly loan amortization was reduced.

The Result

  • The company’s liquidity improved significantly.
  • Principal payments were restored upward toward the original monthly amortization level and the revolver availability was reduced.
  • Over a three-year period the financial condition improved sufficiently to pay off the term loan in full and refinance the revolving line at market levels.