Vicenza (Italy), December 3rd, 2008. Zeno Soave, the founder of Socotherm Group, a large supplier of pipe coating and insulation services both for the oil & gas industry and the deep water sector, and Cristiano Battelli, the Group Chief Restructuring Officer, were considering just how to mend the company’s financial and organizational problems.
The financial crisis broke out in previous investments in 2007 and some blunders caused a lack of liquidity that influenced the group operations. Actually, the consolidated operating income was anticipated to be drastically negative in 2008. In addition to this, an important installment of an enormous amount of debt was coming due.
Therefore, both men were considering how to reorganize the business in order to immediately prevent a potential catastrophe, that would result from an almost certain loan covenant violation.
Learning Objective: This instance is especially useful in corporate finance and restructuring classes. It offers the chance to examine the fiscal and functional soundness of a company that is global that is distressed, to practice the theories of debt capacity that is unused, and to contemplate distinct restructuring strategy from a going concern perspective.
Publication Date: 11/10/2013
This is just an excerpt. This case is about Accounting
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