OCTG Manufacturer & Distributor
Roles
Financial Advisor
Greg Baracato
Managing Director, Other Professionals
With over 30 years of experience in business consulting, corporate management and restructuring, Greg Baracato has substantial expertise in rendering financial advisory and reorganization services on behalf of varied stakeholders in the restructuring and turnaround arena.
James Katchadurian
Senior Managing Director | Partner, Partners
James Katchadurian has significant experience in several highly visible insolvency matters. His responsibilities have focused on advising companies in all aspects of a restructuring, both in- and out-of-court.
William Snyder
Senior Managing Director | Partner, Partners
With executive and entrepreneurial experience spanning close to 40 years, William Snyder has restructured, managed, and guided a multitude of companies in a wide variety of industries.
- Improved EBITDA from losses to positive
- Reduced senior lender debt
- Developed plans that satisfied trade extended payables
The company is a leading manufacturer and supplier of Oil Country Tubular Goods in the petroleum industry. Suffering from the oil price drop and high levels of high-cost inventory, they were at risk of covenant defaults and availability restraints. CR3 stepped in as a financial advisor and liaison to the lender and vendors, overseeing EBITDA improvements of $25m and a reduction of senior lender debt by 70%.
The Situation
- Leading manufacturer and supplier of Oil Country Tubular Goods (OCTG) in the petroleum industry with products including casing, tubing, couplings, production accessories, drill pipes, drill collars and drill string accessories
- Company suffered significant losses in volume and margin after oil price drop; downturn continued as company grappled with high levels of high-cost inventory
- Company was left facing both financial covenant defaults and availability constraints under existing ABL facility
The Work
- Financial advisor
- Negotiated multiple forbearances, assisted with asset sales, appraised inventory, and prepared financial models
- Engaged in discussion with trade vendors and contacted potential lenders for refinancing options
- Invested significant time in managing relationships with both secured lenders and trade vendors with significant past due balances
- Oversaw operational improvements
- Identified options and assisted with the refinance of the ABL facility to a new lender
The Results
- CR3’s work coupled with the improving economic environment (higher oil prices and rig counts) resulted in EBITDA improved from losses of $14.4MM to positive EBITDA of $10.8M
- Reduced Inventory, generated sufficient proceeds to reduce senior lender debt from $50MM to $15MM
- Extended trade payables of $10MM owed to vendors were settled with payment plans that allowed company to service obligations over 12 months, which were all satisfied
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