Cross-Border Restructuring for a Distressed Global Automotive Supplier
Challenge
During a critical transition period, a $4 billion leading global supplier of automotive interiors needed to make significant improvements to its financing arrangements and operations. Specifically, the company was facing challenges with regional and seasonal liquidity forecasting, sub-optimal cash and lending arrangements across its global locations, and inefficiencies in its treasury operations and structure.We provided treasury efficiency recommendations that achieved approximately $70-90 million of targeted seasonal liquidity generation while having a zero-tax impact.
How we helped
Riveron was retained as a strategic and financial advisor to help the company implement the financial and operational changes needed. To improve the forecasting accuracy and predictability, we developed, managed, and transitioned a global 13-week cash flow and liquidity forecast tool across 23 countries, 54 ERP systems, and 106 reporting entities. We also delivered in-person transition training in local languages across North America, UK, Spain, Sweden, China, Luxemburg, Germany, Czech Republic, Slovakia, Poland, Romania, and the Netherlands.
To address the treasury inefficiencies the company was experiencing, we assessed the complex cash pooling and global lending arrangements. Working with the management team, we supported the company through the refinancing of its bond debt and asset-based lending (ABL) facilities and led efforts to raise foreign debt in Mexico. On the operational side, we assisted in the company’s global decentralization roll-out in Europe and provided independent viewpoints for multiple strategic pursuits.
Results
Riveron provided treasury efficiency recommendations that achieved approximately $70-90 million of targeted seasonal liquidity generation while having a zero-tax impact. We also proposed and led a successful Mexican financing effort yielding $130 million of multi-tranche financing on Mexican collateral, whose domestic alternative was $15 million from existing lenders.
Additionally, we supported the company’s due diligence efforts through three rounds of debt refinancing, including $235 million secured bond debt and a $320 million global ABL facility.
Our assistance in the execution of the global restructuring efforts, inclusive of cost reduction actions, resulted in annual savings of approximately $48 million.
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