How we helped a Conglomerate in building a debt refinancing financial model

March 17, 2023

The Context

The client, a Jordan-based Conglomerate in the oil and gas industry, wanted the TresVista Team to build a financial model at the business segment and consolidated group level that represented cash flow improvement between existing terms and the refinanced scenario. The client also wanted a pitch presentation regarding the restructured company’s outlook for the financers.

The Objective

To align debt repayments with expected cash flows and bring efficiency to the capital structure of the conglomerate.

The Approach

The TresVista Team followed the following process:

  • Prepared a 3-statement financial model for each vertical, holding company, and the group to understand the conglomerate and its operations
  • Added functionality to refinance existing debt by incorporating multi-currency loans, revolvers, and mezzanine payment-in-kind (PIK) debt
  • Prepared a pitch presentation with details about the industry and financial performance of each vertical along with the cash flow impact of existing and refinanced debt structure

The Challenges We Overcame

The major hurdle faced by the TresVista Team were:

  • Inadequacy in quality of the disclosures and the data available
  • Change in pitch deck story due to change in management in Q4 2020

The TresVista Team overcame these hurdles by drafting the queries that can be answered in simple Yes/No. The team provided a detailed excel analysis to make the management understand the discrepancies and directly provide the team with the missing links. To change the pitch deck story, the team aligned the new set of information to the previous set to understand the lag between the two and accordingly update the model.

Final Product (Sanitized)

The Value Add – Catalyzing the Client’s Impact

The TresVista Team performed an in-depth analysis to determine the revenue for the oil and gas business attributable to the trading profit and validated the concept of contractual margins applicable to the Jordanian oil and gas business. The model included actual financials till FYE20; however, as the deal proceeded and new quarterly numbers were released, the team did a comparative analysis of the forecast vs actual numbers.