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Power & Gas: Restructuring: Undisclosed: Restructuring & Financial Forecasting

“NG Retail Distributor” is an unregulated natural gas retail distributor that captures arbitrage opportunities primarily by managing physical assets. NG Retail Distributor is involved with natural gas marketing, trading, pipeline transport and capacity management, storage and asset management agreements. Its clients include residential, commercial and utility choice programs throughout six states in the U.S. Midwest.

A regional bank suggested to the borrower that Opportune help it improve its operations and financial forecasting capability. The borrower had triggered a covenant warning, which had alarmed the newly formed bank group. Opportune expeditiously executed the following:

  • Put expertise in the field to collect and understand existing risk profile and reporting capability;
  • Validated process flows and policy adherence;
  • Validated accuracy and quality of borrowing base calculations;
  • Developed mechanism to collect contractual obligations and positions in an environment where there were no procedures; and
  • Designed a snapshot picture of all existing risk positions and financial forecast model used in support of bank group decision-making

After the initial triage period, we helped the client restructure its internal information gathering and distribution process to provide the following:

  • Baseline Risk Management status report delivered to banks
  • Forecast model to support 12 months of expected cash flows
  • Presentation to bank group inclusive of Opportune’s forecast and recapitalization recommendations
  • Roadmap for policy and infrastructure design improvements to support existing and future business
  • Instrumental in obtaining waivers for company to remain operational

While this engagement started as assessing the financial position of the client at the lending banks’ request, in reality it became a strategic review of NG Retail Distributor. Our deep understanding of the retail natural gas business, supply and risk management requirements for this type of business and financial reporting were key to developing an appropriate go-forward strategy.

Opportune’s ability to pull in the appropriate skills from a diverse team allows us to differentiate ourselves from the competition. Because of the complexities of restructuring, Opportune differentiates itself with its ability to leverage experts from within its suite of service lines, including tax advisory, process & technology, accounting and corporate finance. For more information how Opportune’s Restructuring practice adds value to energy clients, CLICK HERE.

Charlie Palmer

Managing DirectorOpportune LLP