A US based equipment supplier to the paper industry had recently been purchased by a financial sponsor. Unfortunately, there had subsequently been a number of technical breaches of covenants and so PMC was asked review the business’s treasury operations.
- Conduct face-to-face meetings with management to obtain an understanding of the business operating environment and specifically, its treasury operations;
- Review cash management processes including cash forecasting, liquidity management and the process for moving cash around the group;
- Establish debt management practices focusing on covenant reporting;
- Assess foreign exchange risk management activities, specifically focusing on processes for identifying exposures and managing these using derivative contracts.
Results & Recommendations
Following this fact-finding stage, we provided management with a report that articulated specific areas of concern and presented a number of recommendations relating to improvements to processes, policies, reporting and systems.