01Situation
A mid-cap mining-services platform — drilling, ground-support, civil — running across multiple commodity verticals, hit by a coordinated downturn in two of the three primary commodities through 2024-2025. Revenue fell 27% across two quarters. The senior facility was 0.6 turns from a covenant trip on a TTM basis. The equipment-financing tranche was on a separate covenant package with different mechanics. The board needed an interim CFO who had worked the cycle before, and could carry the negotiation with the lender group while the permanent CFO was being recruited. Our brief: stabilise the cash runway, run the lender re-engagement, defer the capex programme without breaking the contract book, and hand the seat back to a permanent CFO inside nine months.
02The work
- 01 Liquidity-and-runway model rebuild. Built a thirteen-week cash forecast with three sensitivity layers — base, bear, severe-bear — anchored to commodity-price scenarios. Identified ninety days of incremental runway from contract-billing acceleration, retention-release scheduling, and a working-capital re-engineering on the joint-venture receivables.
- 02 Lender re-engagement. Took the lender group through three rounds of structured re-forecasting — the bear and severe-bear scenarios were on the table before the first covenant test was missed. Negotiated six covenant waivers across the senior and equipment tranches without forcing a refinancing event. Lender relationships ended the cycle stronger than they started it.
- 03 Capex deferral discipline. Re-sequenced the capex programme to defer $14M of equipment purchases by 12-18 months without breaking commitments on the active contract book. Pulled forward two routine maintenance windows to absorb the slack on field-team utilisation.
- 04 Permanent-CFO recruitment. Ran the search with the board's recruiter, sat in on every short-list interview, and built the hand-off package — covenant model, lender-comms log, capex sequencing, contract-book risk register. Handed the seat to the permanent CFO at month eight.
03Result
The platform crossed the bottom of the cycle without a covenant trip, without a refinancing event, and without an outside capital raise. Ninety days of incremental runway proved decisive — the second of the two affected commodities recovered four months into the engagement, and the contract book regained pricing power by month seven. The capex deferrals stayed deferred — no operational impact on the contract book, no field-team utilisation dip beyond a 4% blip in month three. Permanent CFO is in seat and has carried the relationships we built with the lender group into the steady-state retainer model. Engagement closed at month nine; we maintain a quarterly advisory role on the strategic-capital file.
04Lessons
- Lender relationships in a commodity downturn are about the model on the table — show the bear and severe-bear before the first covenant test, not after. Three rounds of structured re-forecasting beat one round of crisis re-forecasting every cycle.
- Capex deferral without operational impact is a sequencing problem, not a savings problem. The biggest mistake is to defer the wrong twenty percent of the programme — the wrong cuts cost three times what they save inside eighteen months.
- Interim CFO seats in capex-heavy resources work need a clean hand-off package. Covenant model, lender-comms log, capex sequencing, contract-book risk register — without it, the permanent CFO inherits three months of catch-up.