Deloitte CRG Newsletter
Hot topics and trends in corporate restructuring
The Deloitte Corporate Restructuring Group (Deloitte CRG) Newsletter addresses the current state and outlook for the Deloitte CRG practice, including recent engagements, announcements, case studies, and upcoming events.
Global Food Product Company
Deloitte CRG serves as the financial advisor to certain lenders to a global food products supply chain provider. After growing through acquisition, the borrower is in the process of integrating its operations and is experiencing traditional growing pains. Deloitte CRG is working with its clients to advise on where the borrower is making progress and where further opportunities for improvement exist. Deloitte CRG’s efforts have identified further process improvement opportunities for the borrower, created transparency amongst the stakeholders, and improved the communications between the lenders and the executive management team.
Pursuant to its obligations under the Credit Agreement Amendment, the company engaged Deloitte CRG to provide services as the company’s chief strategic officer (the CSO). Deloitte CRG will work collaboratively with management and the company’s investment banker, coordinating with the company’s other restructuring professionals, attorneys, and financial advisors to assist in implementing selected restructuring strategies, including; assessing the company’s business plan and operations to identify potential performance improvement initiatives, developing and implementing the company’s financial and operational turnaround strategy and associated activities, overseeing the management of the company’s liquidity issues, and managing the relationship with the company’s lenders and creditors.
Deloitte CRG was hired by a North American lender to help them better understand the financial position of this regional airline and understand the lender’s potential strategic options going forward. Deloitte’s team of financial and aviation industry specialists assisted the lender to work through the airline’s financial picture as presented by the borrower. In addition, Deloitte’s industry contacts assisted the lender to think through potential strategies for managing its debt position and think through the asset allocation position, given the availability of inventory for such aircraft in the secondary market.
Deloitte CRG was recently hired to serve as the financial advisor to a privately held global US $400 million manufacturing company to assist with cost reductions, lender negotiations, and business plan development. The company was faced with a liquidity challenge and had limited capability to forecast estimated future cash needs. Deloitte CRG worked with the company to develop a 13-week cash flow model and a five-year integrated financial model to assist with board and lender discussions.
CHC Group Ltd.
Deloitte facilitates a favorable ruling to approve assets transfer of the parent company to a global helicopter services group, which primarily provides transportation to the offshore oil and gas industry, as well as search and rescue services, leading to a successful restructuring outcome for CHC Group Ltd. and associated entities.
Challenges facing the energy, shipping, and retail industries
By Kirk Blair
The restructuring market has been tumultuous during 2016. This year saw many filings within the oil & gas sector, as well as several high profile shipping and retail filings. Through the next six to 12 months, continued activity is expected in the energy, shipping, and retail industries as we face uncertainty related to global markets, political changes, and technological disruption.