Case Studies

Wind-down of Underperforming Metal Stamping Facilities & Operational Performance Improvement

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

Read More close Created with Sketch.
Home·Wind-down of Underperforming Metal Stamping Facilities & Operational Performance Improvement

The Situation

Metal Stamping for the Automotive Industry. Revenues had shrunk from $200 to $87 million. $10 million in senior debt and $60 million in sub debt. Four US locations, one Mexican operation.

  • Inability to procure raw materials due to negative cash flows.
  • Due to the recession in the automotive market and softening in the construction HVAC markets, the Company experienced a significant drop-off in sales.
  • With the exception of the Mexican operation, which specialized in HVAC stampings, all the US facilities were bleeding cash.
  • The Company was in default on approximately $10 million in secured debt from its senior lender and had almost $60 million in subordinated debt from the management team and Executive Board.

How We Advised

Our experts led the aggressive wind-down of underperforming facilities, including the restructuring and consolidation of the more profitable Mexican operation.

  • The business turnaround was accomplished outside bankruptcy proceedings to protect the equity’s substantial investment.
  • We successfully managed cash for 6 months, staved off the senior lender and vendors, and engineered an equity option to deliver a return on their investment.
  • As a result of our structured and aggressive turnaround efforts, the client was able to address their key issues, wind-down all of their US facilities, ramp up operations in Mexico, sell off several million dollars in M&E and facilities, pay off the senior lender, and achieve positive cash flow from remaining operations in approximately six months.
  • All this was coordinated and managed while avoiding a forced liquidation/bankruptcy by the lender.

Related Practice Areas

> Out-of-Court Wind-downs 
We deliver strategic guidance through the wind-down of business operations or underperforming assets, helping preserve value and reputation while avoiding the disruption, cost, and public scrutiny of formal bankruptcy. Our expert financial and operational advisors apply decades of experience providing exit solutions across a wide range of industries and complexities to deliver, and often execute, comprehensive solutions for distressed businesses. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

Key Contact

For additional information about the engagement or to learn more about our services, contact:

Our Experts