International Company Turnaround



International Company Turnaround -  Solidal Conductores Electricos, S.A.
Vince Harris, AlixPartners
Arvid Trolle, Njord Partners LLP
Francois Moufflet, EY / Solidal
Mark Veldon, AlixPartners
Karen McMaster, Milbank
David Dinis, Uría Menéndez
Nuno Nogueira da Silva, EY
Stewart Higginson, Njord Partners

About the Turnaround:
Founded 50 years ago, Solidal is a leading power cable manufacturer with a production facility north of Porto, Portugal. It supplies cables to transmission and distribution companies, contractors, and wholesalers around the world. Its products span a broad range of the grid requirements in low voltage (1kV), medium voltage (6kV-36kV), and high voltage (45kV-220kV).

Under ownership of the Quintas Group, Solidal had carried an overleveraged balance sheet since early 2000 when a series of investments in Brazil and Angola collapsed. It also sustained a bloated cost structure, with excessive layers of management and onerous remuneration of the supervisory board. 

In early 2018, persistent payment delays to suppliers led to the removal of credit insurance. The lack of liquidity, with no financial support from the banks, hampered raw materials purchases, and production progressively dwindled to a crawl. The company missed payroll for its 363 employees in July 2018 and was on the verge of insolvency when its senior creditor, Njord Partners, approached the controlling shareholders to negotiate terms of a rescue financing. 

The financing and change of control (led by Njord Partners and supported by Milbank and Uria) was achieved via a consensual restructuring with shareholders. This involved a series of complex transactions lasting through December 2019, including bridge financing, a COMI shift of the Luxembourg Holdco (the senior debt borrower), the appointment of English administrators at the Holdco, an open market sale process and credit bid (one of the first Portuguese cross-border restructurings of this kind), the seminal use of the Portuguese RERE (Regime de Recuperação Especial de Empresas) procedure for restructuring approximately €28 million of local sale/leaseback and revolving facilities, and the consensual restructuring of another approximately €16 million of bank facilities and factoring lines in Spain and Portugal.

From late 2018, Njord Partners implemented rigorous liquidity management procedures with the support of EY in a CRO role. Njord Partners and the CRO team engaged and stabilized their relationships with and regained the confidence of key stakeholders, including clients, suppliers, workers, and lenders. This entailed a road show with key utilities customers to stem the cancellation of framework contracts which had been in default. These actions preserved the vast majority of the orderbook intact, allowing production to catch up and delayed orders to be eliminated over the course of four months. In parallel, a number of operational initiatives were implemented. AlixPartners was appointed to develop new procedures around sales and operations planning (S&OP) procedures and the supply chain. The largely Excel-based purchasing was upgraded to MRP in SAP. Furthermore, the reception, stocking, and management of raw materials was devolved from production to a new Incoming materials function within the logistics function. 

The supervisory board was dissolved and a new management team was formed. Njord Partners appointed the acting CRO, Francois Moufflet, as the new CEO. In turn, he recruited a new director of production and created the position of supply chain director. 

Recurring EBITDA in 2019 was €5 million compared to €22.9 million in 2018. The company’s backlog is at its highest historical level, at about four months of sales.

ConferenceAgenda

Agenda subject to change - all times in CDT
 

Tuesday, September 29, 2020  
8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 9:30 a.m.

Guided Meditation Class

Sponsored by Ritchie Bros

9:00 a.m. - 10:00 a.m.

Opening Session: Mega Trends 3.0               

Sponsored by Saul Ewing Arnstein & Lehr LLP

10:00 a.m. - 10:20 a.m.  VIP Access with Mega Trends 3.0 Panelists
10:30 a.m. - 11:30 a.m. 

TMA NOW Event 

Sponsored by AlixPartners, LLP

12:30 p.m. - 1:30 p.m.

General Session: Options! Options! Options! Alternatives to Bankruptcy       

Sponsored by Sherwood Partners, Inc.

12:30 p.m. - 3:30 p.m. 

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

1:30 p.m. - 1:50 p.m.  VIP Access with Options! Options! Options! Alternatives to Bankruptcy panelists 
2:00 p.m. - 3:00 p.m.

Education Session: Contested Issues in DIP Financing in the Uncertain World of Our New Normal

Sponsored by Riemer & Braunstein LLP

2:00 p.m. - 3:00 p.m.

Education Session: Managing Chaos in the Era of Loan Defaults: What Lenders and Borrowers Need to Know

Sponsored by McCarter & English, LLP

4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

4:00 p.m. - 5:00 p.m.  TMA 101: First-Timers and New Members Event 
5:00 p.m. - 6:00 p.m. 

Education Session: The Dark Days and Nights for the Sports Industry

Sponsored by FTI Consulting, Inc.

5:00 p.m. - 6:00 p.m.

Education Session: Beyond the Transaction: Stories of Post-Merger Integrations

Sponsored by CohnReznick LLP

6:00 p.m. - 7:00 p.m. 

TMA Variety Show 

Sponsored by Ritchie Bros

Wednesday, September 30, 2020  
8:00 a.m. - 8:30 a.m. 

Turnaround Yoga Class 

Sponsored by Ritchie Bros

8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms 

Sponsored by Newpoint Advisors Corporation

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 10:00 a.m.

General Session: They Might Be Giants: The Titans of Today and Their Lessons from Along the Way

Sponsored by Hilco Global

10:00 a.m. - 10:20 a.m.  VIP Access with They Might Be Giants: The Titans of Today and Their Lessons from Along the Way panelists 
10:30 a.m. - 11:30 a.m. 

TMA NextGen Event 

Sponsored by Arch + Beam

12:30 p.m. - 1:10 p.m.

Keynote: Mariana Mazzucato: Never Waste a Crisis: Rethinking Capitalism During COVID-19

Sponsored by Gordon Brothers

12:30 p.m. - 3:00 p.m.

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by Newpoint Advisors Corporation

1:10 p.m. - 1:30 p.m.  VIP Access with Keynote Speaker 
2:00 p.m. - 3:00 p.m.

Education Session: Figuring Out Retail: What Was Already Bad Just Got a Lot Worse

Sponsored by Hilco Global

2:00 p.m. - 3:00 p.m.

Education Session: The Impact of COVID-19 on Higher Education: A Schism of Debt, Endowments, and Educational Challenges, Too

Sponsored by Alvarez & Marsal

4:00 p.m. - 5:00 p.m. 

TMA Awards Celebration: "Better Together Roundtable"

Sponsored by Ritchie Bros

4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by Newpoint Advisors Corporation

5:00 p.m. - 6:00 p.m. 

The Business IMPACT of Diversity and Inclusion: Strategic Conversation Workshop

Sponsored by Burford Capital

6:00 p.m. - 6:20 p.m. VIP Access with Diversity and Inclusion Workshop panelists 
6:00 p.m. - 7:00 p.m.  TMA Family Feud
Thursday, October 1, 2020  
8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms 

Sponsored by Gulf Coast Business Credit

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 9:30 a.m. 

Impact Fitness Class 

Sponsored by Ritchie Bros

9:00 a.m. - 10:00 a.m.

Keynote: Duncan Wardle, Innovation & Creativity in a Virtual World

Sponsored by Burr & Forman, LLP

10:00 a.m. - 10:20 a.m.  VIP Access with Keynote Speaker Duncan Wardle 
10:30 a.m. - 11:30 a.m. 

TMA Talks: International 

Sponsored by Deloitte

12:30 p.m. - 1:30 p.m.

General Session: Will the Patient Survive? The Healthcare Industry in a COVID-19 World

Sponsored by Carl Marks Advisors

12:30 p.m. - 3:00 p.m. 

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by Gulf Coast Business Credit

1:30 p.m. - 1:50 p.m. VIP Access with Will the Patient Survive? The Healthcare Industry in a COVID-19 World panelists 
2:00 p.m. - 3:00 p.m.

Education Session: Intentions in Retention: Ethical Considerations When Being Retained in Bankruptcy Cases     

Sponsored by SM Financial Services Corporation

2:00 p.m. - 3:00 p.m. 

Education Session: Market Liquidity and Impact

Sponsored by Deloitte

3:30 p.m. - 4:00 p.m.  VIP Access 
4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by Gulf Coast Business Credit

4:00 p.m. - 5:30 p.m. 

Virtual Capital Connection + Networking Event

Sponsored by Duff & Phelps, LLC and Getzler Henrich & Associates LLC

5:30 p.m. - 6:30 p.m. 

TMA 'Big Tent' Celebration

Sponsored by Ritchie Bros