OCTG Manufacturer & Distributor

• 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