Case Studies
Industries: Distribution, Oil, Petroleum, and C-Stores
Primary Services: Business / Operational Assessments, Financial Forecasting, Strategic Advisory
The client was a $250 million Fuel and Oil Distributor that distributes its products to a variety of customers, including, state and local governments, school systems, and commercial businesses. The Company also has a yacht division that distributes diesel fuel to the mega yacht market both domestically as well as abroad.
The Company’s operations can be segregated into four main operating units:
The Company operated successfully for many years, but encountered significant losses that resulted from a substantial supply contract that was bid without the benefit of a hedge program, and which therefore exposed the Company to a highly volatile commodity market. Also, the Company was unable to collect approximately $2.3 million from a long-standing customer that faced its own set of financial challenges. As a result of the above, the Company triggered certain events of default under its various agreements and amendments with its senior lender. In response to such events of default, the Company’s senior lender provided the Company with a Reservation of Rights letter and required the engagement of a financial advisor to assist the Company with addressing its various financial challenges.
Our experts completed a thorough review and assessment of the Company, its forecasted performance, and the various challenges the Company was encountering. The assessment included individual analyses of the Company’s operating environment, its hedging program and strategies, management overview, and historical financial overview. At the conclusion of the assessment, we presented a series of recommendations, which specifically included the following:
Upon the completion and review of our assessment with the Company and its senior lender, our client was able to execute multiple extensions to its existing forbearance agreement with its senior lender, permitting the Company the necessary time to successfully secure replacement financing.
Brian F. Gleason, CTP
Senior Managing Director
Strategic Advisory Practice
+1 610 659 8118
[email protected]
> Business / Operational Assessment
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