Rubber Enterprises

Situation

Rubber Enterprises is an automotive supplier manufacturing rubber and metal parts for suspension, noise and vibration reduction for the Detroit 3.

Due to the losses, as a result of underperformance, operating losses and losses from currency hedging programs, the lender required the Company to sell or liquidate during the height of the automotive market downturn in 2009.

Solution

Amherst Partners was retained to explore strategic alternatives including a potential sale and refinancing of the Company, as well as assist in analyzing the cash flow and projections.

Amherst managed the bank relationship during the process and worked with management to obtain price increases from customers and reduce costs, returning the Company to profitability with a restructured loan agreement, providing adequate time to explore alternatives.

Results

With profitability restored, Amherst identified and arranged a new lending relationship that provided additional flexibility and availability. The transaction closed in 2009, shortly after the GM and Chrysler bankruptcies.

The resulting credit structure provided necessary funding for operations without giving up equity.