Case Study
Project Debt Buy Back
October 2015- Type of Case :
- Corporate Initiative Management and Support
- Title :
- Debt Buy Back Advisory Support
- Status :
- Closed October 2015
- Value :
- USD 290 million
PROJECT OVERVIEW
- With the single largest stake holding in a restructured petrochemical complex, the Client requested us to assist them in acquiring additional holdings, both equity and debt in the target company (the “Company”), in order to move them into a control position throughout the capital structure.
PROJECT ISSUES
- The Company had a diverse shareholder group with differing and at times conflicting interests. The shareholder group, most of who were looking for an exit, included founders, creditors and strategic investors.
- The Company was in need of working capital funding, but without the support of the shareholders it was not viable to obtain funding from third party sources. The shareholders as a group were not able or willing to provide the necessary support.
- Trust issues amongst the shareholders combined with the diversity of holdings where there was no single controlling entity further complicating the management structure and restart of the plant.
- Notwithstanding the capabilities of the plant and an attractive market for its products the financial position of the Company was going to continue to deteriorate because of the above issues.
WHAT WE DID
- Assisted the development and evaluation of the share and debt buy back, value proposition and overall value capture strategy.
- Assisted the Client with negotiation of key commercial terms with both equity and debt sellers and advised on the structuring and execution.
- Reviewed and advised on the valuation of the buy back securities through the various stages of the process.
- Analyzed the corporate structure and governance of the Company as dictated by its Articles of Association and advised our client on alternative strategies for revising and managing governance.
- Assisted with the implementation of changes to the board of management and the governance of the company through amendments to the Articles of Association.
PROJECT OUTCOME
- The Client successfully acquired a controlling position of the Company.