Swimwear Product Distributor
Roles
Financial Advisor
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Edwin Clark
Director, Other Professionals
Edwin Clark has extensive experience in private equity and investment banking, with knowledge of principal investing and debt capital markets.
Sean Cunningham
Partner, Partners
Sean Cunningham has more than 20 years of experience working directly for and providing restructuring advice and services to debtors, senior lenders, and unsecured creditors.
Barak Tulin
Partner, Partners
Barak Tulin is a creative, analytical, and effective executive with over 20 years of experience in performance improvement, restructuring and turnaround, financial planning and analysis, transaction services and general management.
- Company in violation of credit agreement
- Secured new lender
The company was a family-owned $200MM distributor of swimwear products that had fully drawn on their ABL facility and left with few options, including a potential bankruptcy. CR3 Partners was retained as operational and financial advisor by President and COO to provide analysis, negotiate forbearance agreements and short-term extensions, tighten control on non-operational spending, and conduct market research for new lenders for ABL facility. Company secured new lender with lower upfront fees and less stringent covenant provisions after determining legacy lender would leave company with little cash for future growth investments.
The Situation
- Family-owned $200MM distributor of swimwear products servicing large national retail chains
- Company was negatively impacted by COVID-19 due to retail chains shutting down
- Company had purchased, fully drawn ABL facility of $90MM, and had maturity that would not be met, even with an extension
- Company had few options and senior lenders were looking at a potential bankruptcy
The Work
- CR3 Partners was retained as operational and financial advisor by President and COO of company at recommendation of senior lenders
- Provided liquidation analysis, 13-week cash flow reporting, customer concentration analysis, and risk profile analysis
- Negotiated forbearance agreements and short-term extensions of credit agreement
- Participated in daily and weekly Board updates, which included majority of family shareholders
- Identified and implemented aggressive cost cutting measures, including employee furloughs, rental deferral, and tightening control on non-operational spending
- Determined legacy lender economics of ABL facility were above market and would leave company with little cash for future growth investments
- Conducted market research and sought other lenders that would provide similar ABL facility or alternative structures under more favorable terms
The Results
- Company began to paydown outstanding ABL facility, but had outstanding loans in violation of clean down of debt provision provided in credit agreement
- Compared number of competing term sheets of labor and secured new lender with lower upfront fees and less stringent covenant provisions on entire ABL facility
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