Services: Financial Advisory, Mergers & Acquisitions Industries: Energy/Utilities/Environmental Professionals: Henry Owsley, Patricia Caldwell, Peter Kaufman Business Profiles: Private Equity / Entrepreneur Representations, Shareholder Successes
Gordian Group was engaged as financial advisor to Osyka and conducted a highly successful marketing process that maximized the value of Osyka’s assets and resulted in a significant increase in value to the estate and recoveries to existing equity holders.
Osyka is a private Houston-based oil and gas company that specialized in hydrocarbon exploration and production in Southern Mississippi, the Gulf coast of Texas and Louisiana. In the late fall of 2006, Goldman Sachs-Osyka’s secured lender – declared the Company in technical default of the terms of its credit facility and used that as an opportunity to impose default provisions designed to force Osyka to divest their assets or file for bankruptcy protection. Prior to engaging Gordian, Osyka engaged two different investment banking firms to market and sell all or substantially all of the Company’s assets. Both of these prior efforts failed. Osyka filed for Chapter 11 bankruptcy protection, and Gordian Group was engaged shortly thereafter. Goldman Sachs acted as the stalking-horse bidder in the bankruptcy auction;credit bidding the majority of its secured claim; with the bidding procedures already entered into before Gordian became engaged by Osyka.
Gordian Group was engaged by Osyka to conduct another sale process and introduce a competitive process to the bankruptcy auction.
By orchestrating a robust sale process, and navigating the Debtor through the various challenges inherent in the bankruptcy process, we were able to deliver two bidders to the table whose combined bid exceeded that of the stalking horse by approximately 20%, despite the many negative attributes of the Company’s assets at the time and other exigencies in the bidding procedures inherited by Gordian Group. In addition to the increased bid, Osyka was able to capture a greater allocation of its excess cash collateral than otherwise would have been realized without our assistance. In summary, Old Equity and Management were able to reap approximately $10 million, which was over 10% of the combined total purchase price and excess cash collateral, as a result of Gordian’s efforts in this engagement; even though Osyka’s secured lender did not receive a full recovery.
In short, within several months, Gordian assisted in crafting a POR and sale (implemented in chapter 11) that resulted in recoveries to Old Equity despite the fact that the senior note holders recovered only about 70%.