Pile Driving Company

Division: Phoenix Management Services


Client

The company is one of the largest Pile Driving Companies specializing in municipal, state and large industrial projects. Located in New Jersey, it is owned by a private equity fund and an entrepreneur investor.

Problem

Phoenix was engaged by the Company at the direction of the investors who had purchased the pile driving division of another company a few years earlier. The acquisition was support by a working capital revolver and two term loans in addition to the equity capital provided. After a strong start an economic slump caused the company to show losses. The bank became concerned and requested cash flow and borrowing base projections from the company on a go forward basis. The CFO, having had limited experience in a leveraged banking relationship, was having difficulty producing the requested documentation. The bank requested an outside advisor be retained to assist the company with the projections. Further, the Company had a significant amount of its receivables tied up in project retainage. The bank granted lesser availability and a very tight cap on the retainage from which the company sought liquidity relief as part of the advisor retention.

Solution

Phoenix worked closely with the CFO in producing a 13 Week Cash Flow Forecast and Borrowing Base Roll Forward. In addition, Phoenix worked with the Company in producing a monthly version of the cash forecast that more closely tied to the Company’s financial plan and assisted the Company in establishing a weekly scorecarding process with accompanying narrative. These enhanced forecasts and reporting processes and procedures provided greater insight to the Company to its liquidity position and significantly increased the level of credibility with its lender. This increased visibility and credibility allowed Phoenix, in conjunction with the company’s management and ownership, to negotiate an increase in the working capital availability retainage cap, thereby providing an eventual permanent liquidity solution for the Company.