Manufacturing a Successful Turnaround

Aug 9, 2019 |
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Client

A multi billion-dollar international semiconductor manufacturer

When our client filed for Chapter 11 bankruptcy, they called on RGP to bring in battle-tested consultants to serve as their Chief Restructuring Officer and interim Chief Financial Officer.

Declining demand in consumer goods and tightening credit had adversely affected our client’s liquidity and operational funding. After reporting a $2.4 billion loss, $30 million in cash and $1.5 billion in debt, they pursued bankruptcy and restructuring alternatives.

What We Did

  • Deployed a CRO and interim CFO to analyze our client’s financial operations, recommend turnaround strategies for their significant losses, and evaluate their management team.
  • Simplified and enhanced the cash flow forecasting model developed by our client’s financial advisors and transitioned jobs to internal staff, reducing the number of consultants.
  • Evaluated and resolved 2,000+ claims with aggregate value in excess of $9.5 billion.
  • Provided litigation support, including resolution of certain avoidance actions and served as an expert witness for debtor avoidance actions.

Impact

  • Eliminated inefficient spending by training internal staff to manage functions performed by consultants.
  • Facilitated reorganization plan approved by bankruptcy court in record time with a significant recovery for unsecured creditors.
  • Emerged from bankruptcy in 14 months, having reported four consecutive quarters of operating profit, with approximately $230 million in cash and less than $480 million in debt.
  • Enabled a successful turnaround, which resulted in stock price increase from $10.5 per share on confirmation date to a high of $38 per share.
  • Earned nomination for two M&A Advisor awards for our work on this successful turnaround engagement
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Client

A multi billion-dollar international semiconductor manufacturer

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