invincibility lies in the defense - sun tzu lessons on … · 2019-03-15 · 4 “the victorious...
Post on 15-Mar-2020
2 Views
Preview:
TRANSCRIPT
ENERGY DEAL OF THE YEAR
Invincibility Lies in the Defense - Sun Tzu Lessons on Preparedness from the General
www.DayAndPartners.com 2
“Strategy is not planning in the sense of working through an established list, but requires quick and appropriate response to changing conditions” - Sun Tzu
• Utilizations of OSVs are down (e.g. Upstream Decline, China,
Price of Crude)
• Unrecoverable / misallocated investment - Too many, too large,
too expensive. Some people will never recoup their
investment.
• Credit Concerns (e.g. Petrobas, Pemex)
• OSV’s last shoe to drop - owners are last in line to get haircuts
from their banks (already facing major impairments with blue-
water shipping portfolios, e.g., drybulk & liner)
www.DayAndPartners.com 3
“Strategy without tactics is the slowest route to victory, but tactics without a strategy is the noise before defeat”
- Sun Tzu
• Challenge revenue assumptions and even premier client
default risk
• Suspend your dividend - save cash
• Sell assets - walk away from new build contracts
• Draw down revolvers - maximize the bank’s exposure to you
• Cut SG&A - Starting with executive comp
• Prepare for consolidation OR change of control with fresh
investor capital
www.DayAndPartners.com 4
“The victorious warrior wins first and then goes to war” - Sun Tzu • Develop strategy to shore up your balance sheet BEFORE
approaching your banks
• Do not fall for the forbearance trap
• Don’t lie to your banks - your best leverage is showing
them how bad things are, not misrepresenting to them
with optimistic projections
• Never use your cash to satisfy bank covenants
• Don’t play the LTV game
• Hire an adviser - Let management focus on day-to-day
operations and remove emotion from tough decisions
www.DayAndPartners.com 5
Conclusion
“Unhappy is the fate of one who tries to win his battles
without cultivating the spirit of the enterprise. The
enlightened leader plans ahead and cultivates his
resources.”
www.DayAndPartners.com 6
CONTACT INFORMATION
WEB
www.DayAndPartners.com
CONTACTS
Randee DayPresident & CEOrandee@dayandpartners.com
Mark Lang Managing Director mark@dayandpartners.com
Eftychis Gregos-MourginakisDirectoreftychis@dayandpartners.com
top related