Devonshire Holdings, Inc. - Corporate Financial Advisors

Multinational Consumer Products Company

The Challenge
This large, multinational, consumer product company required reconstruction of part of its debt portfolio (in excess of $1 billion) to reduce interest and other costs, and to improve the financial structure of the holding company as well as the operating subsidiaries.

The Method
Devonshire management, with the assistance of the corporation's worldwide financial staff, developed and executed a three-pronged program aimed first at generating cash through a reduction in both current and fixed assets and the pre/repayment of inter-company debt by its subsidiaries. Secondly, the payment of dividends and capital reductions were funded by the establishment of direct financing sources from the domestic and international subsidiaries. Finally, the cash proceeds were upstreamed to the holding company in order to repay the original debt and to improve the terms on the remaining debt.

The Results
The Company was able to successfully renegotiate its total funding position, including mezzanine and subordinated debt. This allowed an overall deleveraging of its financial position, while financial and operating procedures at the operating companies were substantially improved. This resulted in an ongoing acceleration of annual cash flow from operations, reduced leverage and improved management processes and controls, which ultimately paved the way for a successful public offering.




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