Streamlining Treasury and preparing for growth and scale

A private equity firm purchased two transportation companies from another private equity firm with an intention to keep separate treasury and financial operations while centralizing execution. The company sought PMC’s assistance in identifying the company’s target Treasury model including processes, decisions, roles, and governance / controls.

Challenges

• Significant number of global banking relationships and accounts leading to poor liquidity visualization and excessive banking fees.

• Lack of comprehensive cash flow forecast with corresponding poor global cash utilization.

• Suboptimal intercompany funding structure resulting in emergency/unanticipated funding requests.

• Non-existent FX hedging policy to protect earnings.

• Dated operational, liquidity and risk management policies and procedures.

Solutions

• Implemented a global 13-week cashflow forecast incorporating both enhanced data feeds and global controller inputs

• Optimized global banking relationships and services to enhance liquidity utilization while reducing fees

• Implemented cash pools and global liquidity visualization with automated bank data interfacing

• Deployed FX exposure identification process and developed FX hedging program to protect earnings

• Centralized intercompany lending operations, revise policies and established formal tracking solution

• Updated organizational policies and procedures

Benefits