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Energy

SOLIC professionals have experience across both regulated and non-regulated energy firms:

  • Regulated Utilities
  • Oil Field Services
  • Renewable Energy

ENERGY FUTURE HOLDINGS CORP.

Restructuring

Company Description:

  • Energy Future Holdings Corp. (the parent of TXU Energy, Luminant Generation, and Oncor Electric) is a $6.2 billion revenue / $33 billion asset power generation and downstream delivery company.

Challenges Faced:

  • Energy Future Holdings at the time of its Chapter 11 filing was capitalized with in excess of $40 billion of debt and $8.0 billion of equity.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor, pursuant to the authority delegated to and under the direction of the Chairman of the Board and its disinterested directors.
  • Was retained based upon SOLIC’s recognized expertise and extensive experience and knowledge in providing restructuring and financial advice in connection with distressed companies.
  • Services included, among other things, review of Energy Future Holdings’ contemplated plans of reorganization, intercompany claims, financial elements of tax related issues, financing proposals and future financing needs, and other such restructuring matters as required and agreed upon.

Result Highlights:

  • Provided Disinterested Directors with independent analysis pertaining to various key elements in support of the Company’s targeted emergence from bankruptcy.

MedCath test tombstone

BOSQUE POWER COMPANY

Restructuring

Company Description:

  • Bosque Power Company is an owner/operator of a natural gas fired power plant providing energy and ancillary services to the Texas power market. The Company’s private equity sponsor had invested over $300 million of equity in the facility and lenders had provided over $450 million of debt financing.

Challenges Faced:

  • Bosque sought bankruptcy protection after declining wholesale electricity rates and excessive leverage resulted in its inability to service its capital structure. While Bosque initially planned to reach an agreement with its senior lenders in an out-of-court restructuring and presented a proposal to the lending group before filing, the parties were unable to reach an out-of-court settlement and Bosque sought bankruptcy protection.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor to Bosque for the Chapter 11 bankruptcy process.
  • Provided a review and assessment of the Company including: financial performance and outlook, current valuation analysis, competitive position and viability of the Company’s business plan, and senior debt transaction documents.
  • Identified and evaluated a range of strategic alternatives including (i) a Plan of Reorganization (POR) involving new equity from sponsor and a cramdown of exiting lenders, and (ii) a sale of the power plan with liquidation.

Result Highlights:

  • SOLIC professionals’ analysis and support during the contentious bankruptcy culminated in a successful sale of its power plant to Calpine for $432 million.

VAREL INTERNATIONAL

Restructuring

Company Description:

  • Varel International was the largest independent manufacturer and supplier of drill bits in the global oil & gas market. In addition, the Company provided drill bits to blasthole mining, industrial, construction and water well drilling businesses.

Challenges Faced:

  • As a result of a leveraged recapitalization transaction and a subsequent global drop in drilling demand and rig count due to a decline in oil prices, Varel was in default under it loan agreements.

Solutions Provided by SOLIC Professionals:

  • SOLIC was retained in connection with a restructuring of Varel’s $240 million of debt facilities.
  • Specific advisory support included:
    • An initial review and assessment of the Company’s operations.
    • Assistance in the development of a 5-year financial forecast.
    • Development of a comprehensive analysis of all potential capital restructuring strategies.

Result Highlights:

  • Negotiated with senior and mezzanine lenders to amend the existing credit agreement to provide adequate headroom to the Company during the recovery period, including:
    • Reduction in current pay interest on senior secured credit facilities and mezzanine debt.
    • Extended maturities on senior secured credit facilities and mezzanine debt.

TOTAL SAFETY

Restructuring

Company Description:

  • Total Safety is the world’s premier provider of integrated safety and compliance services and products, including gas detection, respiratory protection, safety training, fire protection, compliance and inspection, comprehensive flare services, industrial hygiene, onsite emergency medical treatment/paramedics, communications systems, engineered systems design, and materials management. It operates from 150 locations in 21 countries.

Challenges Faced:

  • The Company had gone through a series of acquisitions and subsequent integrations, which created liquidity constraints and sub-par branch performance.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor to review Total Safety’s business plan and overall financial processes and procedures with focus on: (i) cash management controls, (ii) receivable collection enhancement, (iii) revenue cycle, credit, and cash application process reviews, and (iv) implementation of EBITDA improvement initiatives across the branch organization.

Result Highlights:

  • Relieved liquidity crisis through effective cash management, optimizing working capital and identifying material cost structure improvements.
  • Developed and implemented cash collection process improvements resulting in positive liquidity impact in excess of $3 million.
  • Improved overall EBITDA in excess of $1 million in both organizational realignment and individual branch operational improvements.

PASADENA TANK CORPORATION

Investment Banking

Company Description:

  • Pasadena Tank Corporation (“PTC”) is a closely-held, family-owned business and a leading provider of engineering, fabrication and construction, and repair and maintenance services for aboveground storage tanks (AST). The Company provides these services for customers that produce, process, store and distribute petrochemical products throughout the world.

Challenges Faced:

  • The family that controlled PTC was seeking a sale to provide liquidity and for estate planning purposes.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals were engaged as exclusive financial advisor and successfully structured, negotiated and closed this transaction.

Result Highlights:

  • The Company entered into a definitive agreement to merge with HMT Inc., a portfolio company of a private equity investor, which provides a suite of products and services to the AST industry through product sales, inspection, repair and maintenance, fabrication, engineering and design, coating and lining. The combination yielded a well-respected, full-service leading supplier to the petrochemical industry.

PROJECT TIME & COST, INC.

Investment Banking

Company Description:

  • Based in Atlanta, GA, Project Time & Cost, Inc. (“PT&C”) is a leading provider of cost engineering and forensic consulting services. The Company provides an extensive array of cost estimating, scheduling, project management and risk assessment services for construction, environmental remediation and nuclear facility projects and forensic engineering services in connection with losses arising from damaged property. The client base primarily consists of federal agencies that are responsible for large, complex construction and environmental projects, as well as insurance companies with significant commercial and residential property portfolios.

Challenges Faced:

  • The founding partners were seeking a sale or recapitalization to provide for liquidity and estate planning.

Solutions Provided by SOLIC Professionals:

  • Engaged as exclusive financial advisors to explore various capital and strategic alternatives including the recapitalization of the Company.
  • Worked closely with the Company’s shareholders and management to identify various liquidity and recapitalization alternatives.
  • In positioning to a diverse group of potential acquirers, successfully highlighted (i) the unique growth opportunities in providing cost engineering and forensic consulting services to the Federal government and the insurance industry, as well as (ii) the Company’s leadership position within its core markets.

Result Highlights:

  • SOLIC professionals secured Hancock Park Associates as a strategic investor in PT&C, acquiring a majority interest in PT&C and providing substantial liquidity to its founders.

TENSAR LEASE FUNDING CORP.

Restructuring

Company Description:

  • Tensar Lease Funding Corp. is a special purpose finance vehicle consolidated by Tensar Corporation, a U.S.-based multinational holding Company whose subsidiaries develop and manufacture an integrated suite of construction-related products and services that provide soil stabilization, earth retention, foundation support and erosion and sediment control for infrastructure end-markets.

Challenges Faced:

  • Despite profitable operations, due to the combination of shifting market demand for construction services and the overhang of loan commitments from a prior capital restructuring, Tensar was unsuccessful at addressing imminent debt maturities through refinancing in either the high yield bond market or via a traditional bank debt. As a result, Tensar defaulted under its legacy loan obligations.

Solutions Provided by SOLIC Professionals:

  • Engaged to provide financial advisory services to optimize the Company’s cost of capital, including an assessment of current projection model and business plan, and analysis of capital restructuring alternatives.
  • Key activities included:
    • Evaluating and analyzing the cost of each layer of capital, and advantages and disadvantages under each capital restructuring alternative, including valuation analysis, debt capacity analysis and capital structure modifications.
    • Coordinating with outside legal counsel to prepare contingency plans for a possible in-court scenario, which was ultimately avoided.
    • Successfully negotiating a multi-party forbearance agreement, determining strategic restructuring alternatives, and advanced discussions to achieve a consensual out-of-court restructuring.

Result Highlights:

  • Completed a capital restructuring of $280 million of senior debt and $100 million of subordinated debt.

TUBULAR PRODUCTS COMPANY

Investment Banking

Company Description:

  • Based in Birmingham, Alabama, Tubular Products Company (“Tubular”) is a closely-held, family-owned business and a recognized leader in the design, engineering, manufacturing and supply of value-added laser cut carbon steel tubing, fabricated tubular components, and welded sub-assemblies. Tubular’s products are sold into a variety of end markets, including outdoor and power transmission equipment, all-terrain, automotive and other vehicles and reusable coil carriers throughout North America.

Challenges Faced:

  • The equity holders were seeking a sale or recapitalization to provide liquidity and estate planning needs.

Solutions Provided by SOLIC Professionals:

  • Engaged as Tubular’s exclusive financial advisor and worked extensively with Tubular’s shareholders to effectively market the Company to a diverse group of strategic and financial acquirers by (i) illustrating Tubular’s broad product offerings to multiple and diverse end markets, and (ii) highlighting the Company’s value-added processing capabilities that consistently drive high-margin operating performance.
  • Successful marketing process resulted in significant interest in Tubular, whereby SOLIC professionals structured, negotiated and successfully closed the acquisition.

Result Highlights:

  • Tubular Products Company was acquired by Samuel Manu-Tech Inc., a publicly-traded industrial products company that is listed on the Toronto Stock Exchange (TSX: SMT). This transaction allowed SMT to expand its steel tubing operations and further develop its value-added products throughout North America.

Representative experience includes transactions led by SOLIC professionals at predecessor firms