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Perspectives

Deloitte CRG Newsletter

Liquidity planning and credit management for COVID-19

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. This month we provide a deeper look at potential impacts of COVID-19.

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Working capital solutions for companies with urgent cash needs

Implementing a liquidity management and mitigation program will be critical to providing short-term cash needs in the face of declining sales prospects. In certain cases, the scale and urgency of the short-term working capital requirements of our clients have taken the company’s management team by surprise, emphasizing the need to act decisively in a resilient workforce and thrive in a virtual environment.

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COVID-19 working capital solutions

Addressing the liquidity impact of COVID-19

Supply chain disruptions and travel restrictions caused by the spread of COVID-19 are resulting in significant operational and financial problems for many companies. We explore liquidity planning and credit management options for companies with urgent cash needs.

Recent engagements

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.

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global food

Paper Products

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.

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Paper products

Regional Airline

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.

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Regional Air

Manufacturing Company

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.

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Manufacturing company
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