Crown Central Petroleum

Situation

Rosemore effected a leveraged acquisition of Crown Central, which was engaged in refining, pipeline distribution and retail sale of petroleum products. Crown Central was adversely affected by declining crack spreads and the higher costs associated with holding vast petroleum inventories at higher than historical price levels. Crown Central’s public bonds were trading at prices well below par.

Engagement

Gordian Group was engaged by Rosemore to advise with respect to maximizing the value of its equity stake through revised business strategies, recapitalizations, sales of assets, or otherwise, and to deal with the various creditor constituencies.

Outcome

Gordian Group conducted extensive valuation analyses on each of Crown Central’s businesses in order to advise the Rosemore Board with respect to its alternatives. In addition, Gordian Group successfully worked with the client to expand the credit facilities, which provided additional needed liquidity. Gordian Group also advised the Board with respect to the disposal of substantially all of Crown Central’s assets, including the retail gasoline business. As a result of the process, Rosemore was able to preserve an equity recovery.