Manufacturing a Successful Turnaround
August 9, 2019
< 1 Minute Read
When a multibillion-dollar international semiconductor manufacturer filed for Chapter 11 bankruptcy after reporting a $2.4 billion loss, $30 million in cash and $1.5 billion in debt, they called on RGP to bring battle-tested consultants who served as their Chief Revenue Officer and interim Chief Financial Officer.
Declining demand in consumer goods and tightening credit started to adversely affect liquidity and negatively impact our Client’s ability to fund operations leading them to seek bankruptcy and restructuring alternatives.
What We Did
- Deployed a CRO and interim CFO to analyze our Client’s financial operations, recommend turnaround strategies for its significant losses and evaluate its management team.
- Simplified and enhanced 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 over 2,000 claims with an aggregate value in excess of $9.5 billion.
- Provided litigation support, including resolution of certain avoidance actions and served as an expert witness for the debtor in its avoidance actions.
Impact
- Eliminated inefficient spending by training internal staff to manage functions performed by consultants.
- Facilitated plan of reorganization 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.
- Successful turnaround resulted in stock price increase from $10.5 per share on confirmation date to a high of $38 per share.
- Nominated for two M&A Advisor awards for our work on this successful turnaround engagement.
