Operational Turnaround — Sale: Metal Stampings Manufacturer

Client

A Metal Stampings Manufacturer serving automotive OEM and Tier I customers had experienced seven figure quarterly losses for two years.

Situation

  • Defaulted on senior debt and lender blocked availability
  • $750,000 Borrowing Base (BBC) misstatement issue
  • Absentee ownership

Solution

  • Engaged BlueWater Partners as Financial Advisor to help board and shareholders develop a turnaround plan
  • Completed 13-week cash flow, corrected BBC issue in two weeks and negotiated a Forbearance Agreement providing time
  • Conducted operations and cost accounting assessments, concluding pricing was an issue
  • Contacted largest customer, executed an Accommodation Agreement which included competitive price increases and established progress milestones
  • Once profitable, shareholders concluded a “going concern” sale was the best option

Result

  • Closed on stock sale to a foreign strategic buyer
  • Saved all jobs
  • Paid off senior debt in full; senior lender became the lender to the buyer
  • The buyer assumed all trade debt

Published with client permission