Vantage Performance acted as the Chief Restructuring Officer (CRO) for this project.
Plant Hire Group hit by mining downturn.
A well established plant hire group turning over $25M with a branch network of 12 stores had expanded their footprint during the oil and gas mining boom. The sudden downturn in the sector left the business exposed to substantial debt and declining utilisation and revenue. As a result the group made a net loss of $1.5M for FY16.
The business had breached its banking facilities with its major financier and had an immediate working capital requirement of circa $2M.
How we turned things around.
Our first step was to conduct a strategic review of the group to assess their options whilst implementing a business stabilisation plan. We developed an initial working capital plan comprising some 47 initiatives totalling $7M.
Following our strategic options review the decision was taken to close the loss making branches, recycle the newer items of plant to the remaining stores and sell a range of surplus items of plant and equipment to pay down bank debt and meet the working capital shortfall.
We negotiated a standstill agreement with the major financier along with a 4 month equipment finance holiday and assisted the FC in negotiating an ATO and OSR payment plan and a range of creditor plans.
The restructure and turnaround plan was successful and the group has just reported an increase in EBITDA from $1.5M to $5.5M for FY17. They have also opened 2 new branches and are looking for further expansion opportunities.
A very pleasing result as we were able to save $10M in equity for the directors and 80 jobs.