Crown Petroleum

Client

Crown Petroleum, a privately held refining company and operator of retail gas distribution outlets with annual sales of $1.5 billion.

Challenge

The Company had looked for more than a year to its parent for constant infusions of cash to maintain operations and payroll. Facing a severe cash crisis the Board demand that management provide it with an evaluation of the Company’s solvency and cash burn. Realizing that it faced a number of financial and operational issues, the Company requested that Bridge perform a review of its operations and a valuation of its assets in the context of its wish to evaluate various strategic alternatives.

Solution

Bridge professionals performed a comprehensive process value analysis, evaluated the Company’s performance management systems, operations and performed a valuation of the business. Bridge was able to identify the primary drivers affecting cash burn and to identify the primary liabilities facing the company over the next few years. The major liability related to government requirements that Crown’s two refineries be converted from high sulfur to low sulfur oil operators and that in that context its past environmental issues be remediated. Following the delivery of its report Bridge was asked to and did provide an interim Chief Financial Officer to assist the company in implementing its restructuring and the conclusions identified in the report.

Results

Bridge’s completed assessment provided a baseline for a comprehensive business reassessment which ultimately led to a decision by the Board and the major shareholders to market each segment of the Company – refining, retail gas and convenience markets, wholesale oil and gas distribution – for sale as a way to satisfy outstanding operating liabilities and eliminate the public debt still on the Company’s books without impairing the long term viability of Crown’s parent and the other business activities of its shareholders.