Mainland China Magnesium Alloy Company

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Situation – global investor with over $20 million invested in money losing operation; need forward visibility to make investment and/or action decisions.

·         Management had gone through millions of investor capital with no profit in sight.

·         Low global market prices with narrow spread between pure magnesium and alloyed magnesium prices.

·         Chinese company takeover of this market had de-stabilized the market, reducing demand further.

·         Non-Chinese competitors in US, Canada, Australia, France, Norway had exited the business.

Actions Taken – performed a detailed, on-site, assessment of the operation, cost structure, supply chain variables and environment, currency and other factors to develop investment decision and action plans;

Results – client followed recommendations to not invest any more money in the company; later sold his stake for a substantial gain, even while the plant continued to lose money.