- With $30 million in annual sales, this company provides wireless service in the rural Heartland, using GSM format as an affiliate of a major international wireless service provider, T-Mobile.
- Company was highly leveraged with $50 million in debt, but was otherwise a well-managed and modestly profitable company in the mid stages of turnaround with its “second” management team in place who had replaced the “spend and grow” team a few years earlier.
- At issue was the lenders’ concern about the company’s ability to meet its highly aggressive growth plan in a weak telecommunications market and hence its ability to repay its loans given its modest EBITDA.
- Provided an assessment that helped the company reset its financial plan to ambitious yet achievable levels, installed our 13-week cash flow projection tool to manage tight liquidity, relieved day-to-day lender pressure on management and helped improve the financial-control infrastructure.
- Developed financial restructuring plan.
- Initiated and negotiated a financial restructuring plan involving $4 million of new capital raised and the conversion of senior debt to sub debt and equity to right-size the balance sheet.
- This restructuring provided the secured lender with a high probability of 100% recovery of its loan over a five to seven year horizon.
- The Company is performing in line with its more realistic growth and profit plan and is now properly capitalized for reasonable growth.