Bayou Steel Group is a North American steel manufacturing plant focused on the production of structural steel and merchant bar products to primarily serve the Midwest and Eastern construction markets. Bayou is a large PE firm portfolio company.
Due to extenuating circumstances, the company encountered a material liquidity shortfall and faced default on its senior revolving credit and term loan facilities. Bayou sought protection via filing for Chapter 11. During the bankruptcy period, the company idled production activities and focused on liquidating its on-hand inventory for the benefit of its secured and unsecured creditors.
Candlewood Partners was engaged by the company to serve as financial advisor during the wind-down period, and to run a marketing process for the company’s assets to be sold via a Section 363 transaction. The assets marketed for sale consisted of two steel mini mills and two distribution warehouses, which, taken together, included over 621 acres of land and over 1.3 million square feet of properties.
Candlewood’s advisory services during the Chapter 11 process included identification and installation of a CRO, creation and ownership of cash flow budgets and all related analyses, and daily communication and negotiation with senior revolving and term loan creditors, unsecured creditors committee and all other involved parties.
Candlewood’s marketing process involved communications with nearly 300 different potential financial and strategic buyers and culminated in an auction that had participation from more than 10 of those parties. In less than 45 days after the auction, the company’s assets were successfully sold in a single transaction to a strategic buyer whose plans included a restart of operations.