Gordian Group advised the Private Equity Sponsor to effect a consensual restructuring with new capital and a materially deleveraged capital structure in the face of unprecedented market headwinds.
Undisclosed PE-Backed B2B Media Company
CLIENT: Undisclosed PE-Backed B2B Media Company
In early 2020, the Company began to feel the effects of the COVID-19 pandemic as marketing budgets were slashed across industries. As contract cancellations came flooding in and the Company’s cash balance began to evaporate, the Company found itself staring in the face of an imminent liquidity crisis, with only a few weeks’ cash runway before missing payroll. To make matters worse, the Company’s lender became extremely truculent, as it began to realize the effects of the global pandemic would affect the Company’s ability to service its debt.
The Company’s lender made clear during initial discussions that it was seeking to take over the equity. It was around this time that the Sponsor engaged Gordian to advise on strategic options related to dealing with the lender.
The Private Equity Sponsor of a Company that publishes trade various industry materials together with B2B marketing services engaged Gordian to advise on strategic options related to dealing with the lender.
Through several weeks of intense back-and-forth discussions, Gordian advised the Sponsor on its range of options, including an assessment of the downside to the lender under certain more draconian alternatives. Using the classic Gordian “carrot and stick” approach, we were able to then negotiate (together with Sponsor counsel, Gibson Dunn) multiple lender forbearances and ultimately a global restructuring that included the elimination of a meaningful portion of existing debt together with a new money facility from the lender that gave the Company the runway it needed to survive the liquidity crisis and carry on as a going concern – all with the Sponsor remaining in control.