When a landmark cross-border restructuring recapitalizes a global logistics business

  • An international automotive and technology logistics specialist faced $1.1B in debt and a highly unprofitable tech contract
  • Key to the financial restructuring was making landmark use of an English scheme of arrangement by amending the governing law of the senior secured credit facility and unsecured notes to English law
  • AlixPartners was there when it mattered to help significantly reduce funded debt by $690M, repay, in full the existing asset-based lending facility (ABL), establish a new ABL facility and raise liquidity
“This marks the completion of a recapitalization that positions the company for long-term success. With this new foundation and financial flexibility, we expect to continue to grow, strengthen our business, and provide our customers and partners with the first-class service that is the bedrock of our company."
—Brian Enright, Chief Executive Officer, syncreon

The situation: Global logistics provider weighed down by unsustainable debt

Syncreon is a leading provider of global logistics services to technology and automotive manufacturers. The company is headquartered in Michigan, USA, with a Dutch holding company and 14,000+ employees across 100+ facilities, 20 countries and six continents.
 
Despite revenue growth, syncreon faced significant struggles relating to approximately $1.1 billion of debt, consisting of an asset-based lending (ABL) facility, liquidity loan facilities, senior secured credit facility, and unsecured notes. In addition to a highly levered capital structure, syncreon also had a significantly unprofitable contract with one of the world’s largest technology companies. This commercial failure significantly restrained liquidity and made servicing its debt impossible. 
 
The situation was complicated by the cross-border nature of the organization, comprising more than 60 separate entities—half of which were obligors for the company’s funded debt—operating under 20 different jurisdictions. This included having to manage any solvency-related jurisdiction concerns. Alongside a rigid ABL facility, it frequently struggled to meet vendor obligations due to frictions in the process of moving cash around the globe.
 
This picture, compounded by the prospect of debts maturing from 2020, prompted syncreon to market the potential sale of the business—a process which concluded with no buyer. 
 
AlixPartners was appointed as financial advisor to assist syncreon through a restructuring process, with responsibilities for cash management, evaluating the business plan, vendor management, communication strategies and contingency planning.  

The approach: Negotiating a first-of-its-kind, cross-border financial restructure

Setting syncreon on a robust new financial track required the coordination of various moving parts, from leverage, liquidity and the expectations of stakeholders, to the international nature of the business. In order to deliver a successful and timely transaction, global jurisdictional expertise was needed. 
 
After months of hard-fought negotiations, the global transaction team—led by AlixPartners, PJT Partners and Weil, alongside syncreon senior management—completed a landmark, cross-jurisdictional restructuring of syncreon’s Dutch and English subsidiaries. This was made possible by amending the governing law of the company’s senior secured credit facility, and unsecured notes, to English law, paired with Chapter 15 recognition proceedings under the US Bankruptcy Code, and the Companies’ Creditor Arrangement Act (CCAA). 
 
AlixPartners’ US and UK Turnaround and Restructuring teams worked closely with syncreon’s senior management and other debtor advisors to help complete this landmark global restructuring, becoming the first company to ever use an English scheme to restructure debt issued by a US-based group. In so doing, it has given global companies a blueprint for navigating English courts in order to avoid protracted US-style cross-border proceedings.

The solution: A better funded debt and ABL arrangement

AlixPartners was there when it really mattered to help syncreon eliminate commercial concerns around its business, safeguard more than 14,000 jobs, and provide an invaluable multi-million-dollar injection of liquidity. 
 
By materially reconfiguring syncreon’s capital structure, its funded debt has been reduced by approximately $690 million. Meanwhile, its annual debt service has been reduced by $51 million, and a new ABL facility established that better suits syncreon’s commercial and operational footprint.
 
In addition, the raising of an incremental $125.5 million in liquidity from an ad hoc group of lenders ensured syncreon’s ongoing operations were secured.
quality standard syncreon

When it really matters: A $690M funded debt reduction and a fresh way forward

This case demonstrates the achievement of a ground-breaking financial restructuring that has not only secured the future of a global company, but legally paved the way for others.

By bringing intelligent, much-needed clarity to a complex cross-jurisdictional financial landscape, AlixPartners has helped transform an international group’s debt funding arrangements and generate the liquidity needed for a more secure, successful future.

 

"syncreon is thankful for the continued support of our many stakeholders, especially our customers and employees worldwide. Their support has been integral to the successful outcome of this process.”
—Brian Enright, Chief Executive Officer, syncreon

This case demonstrates the achievement of a ground-breaking financial restructuring that has not only secured the future of a global company, but legally paved the way for others.

By bringing intelligent, much-needed clarity to a complex cross-jurisdictional financial landscape, AlixPartners has helped transform an international group’s debt funding arrangements and generate the liquidity needed for a more secure, successful future.

 

"syncreon is thankful for the continued support of our many stakeholders, especially our customers and employees worldwide. Their support has been integral to the successful outcome of this process.”
—Brian Enright, Chief Executive Officer, syncreon

2020tma transaction social syncreon client story

TMA Transaction of the Year Winner

For their work on this case, AlixPartners was named TMA Transaction of the Year Winner (international company) by the Turnaround Management Association.  Recognition is also given to Managing Director Tom Osmun and Director Todd Zoha, who led the AlixPartners team working with our clients at syncreon.

For their work on this case, AlixPartners was named TMA Transaction of the Year Winner (international company) by the Turnaround Management Association.  Recognition is also given to Managing Director Tom Osmun and Director Todd Zoha, who led the AlixPartners team working with our clients at syncreon.

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