Insights
- A successful parent company operated and maintained several independent companies under common ownership
- In addition to a parent company line of credit, there were additional loans and notes between companies and some external debt, all with varying rates and maturities
- Cash flows between companies were a challenge, as well as anticipating future cash demands related to the loans and notes
- The company was also preparing for a large expansion project and was seeking external financing
Action
- The Newport partner became CEO advisor and immediately analyzed unprofitable agreements, as well as collecting data on all loans, notes and outstanding debt
- Financial analyses and projections were developed, including detailed cash flows between related companies
- Expansion of a line of credit was achieved that reduced inter-company debt
- Working together with the CFO, controller and key project personnel, a project financing plan and financial projections were created to guide the expansion
- Strategic, financial and project planning skills were utilized to advise the client
- The Newport partner’s personal contacts, as well as Newport’s firm contacts, were tapped to arrange introductions and meetings to key investors and industry partners
Results
- Clarity was achieved for current and future cash flow demands between companies
- A robust financial strategy was structured to support the expansion project
- Assistance was provided for securing capital commitments to successfully fund the requirements for the project
