Spero Electric Corporation
Spero Electric Corporation
turnaround & refinancing
Outline of Services Performed:
- crisis management
- debt restructuring
- turnaround management
- business process improvement
- executive staff recruiting
- lender due-diligence preparation
Beneficiary of RHG's Expertise:
Poor financial performance in 2004, 2005 and 2006, resulted in the Company’s bank requesting that it find a new lender. The Company negotiated an “informal forbearance” agreement to outline the conditions for the bank’s exit. As the Company was approaching the end of the second forbearance period with neither new lender nor a plan for one, the Company’s accounting firm recommended RHG’s help. In December 2005, RHG was engaged to navigate the banking crisis, stabilize the relationship, and quickly develop a strategy and process to turn the Company’s financial and operational performance
around and refinance its debt with a new lender.
Client Quotes:
Stephen R. Haynes
Managing Director
“In 2005, we engaged The Richard Henry Group to assist one of our portfolio companies with business financial analysis, pricing strategy, staffing, product differentiation, logistics, I/T, marketing and channel strategy. The Richard Henry Group displayed a keen knowledge of the retail industry and necessary related components allowing us to successfully implement a process to assemble and coordinate a team to position and launch our products to national retail chains. The experienced RHG team was able to timely and effectively deliver what they promised and their guidance helped us avoid many problems.”
Detail of Services by RHG:
Richard Henry Group immediately developed a 13-week cash flow plan and presented to the current lender its plan to stabilize the existing relationship and extend the forbearance period. This action gave sufficient time to turn the Company around, improve financial and operational performance, and find a new lender. In order to identify problems causing the poor financial performance, RHG analyzed, assessed, and recommended constructive changes regarding the following:
- existing financial reporting systems,
- cash flow issues,
- operational performance,
- staff capabilities,
- banking processes,
- vendor relationships,
- customer relationships,
- inventory management,
- outstanding litigation issues,
- sales and marketing processes,
- current debt,
- recurring and non-recurring expense issues.
After stabilizing the banking relationship, RHG moved quickly to accomplish the following:
- recruit, negotiate, and hire an individual to replace the existing controller with a Chief Financial Officer;
As a result, the Company was able to add required personnel and purchase the additional capital equipment
needed to expand.