An Overview of Leveraged Buyout Methodology

Introduction

You're sizing up how acquisitions drive returns: a leveraged buyout (LBO) is an acquisition funded mainly with debt to boost equity returns. Private equity firms, strategic corporate buyers, and sponsor-led consortia are the usual buyers, targeting businesses with steady cash flow. The typical hold period is 3-7 years. Here's the quick math: buy a company for $100m, finance roughly $60-75m with debt and the remainder with equity ($25-40m), then use cash flow plus operational gains to pay down debt and magnify equity returns - what this estimate hides: interest rates and syndicate terms change outcomes and results defintely vary. LBOs buy cash flow, load debt, improve operations, then exit for higher returns.

Key Takeaways

• LBOs use mostly debt to amplify equity returns over a typical 3-7 year hold; success hinges on predictable cash flow and operational gains.
• Ideal targets have stable EBITDA, low cyclicality, and a market position that can carry leverage and grow earnings.
• Capital structure blends equity, senior debt (commonly 4-6x EBITDA), and subordinate debt (total up to ~6-8x in permissive markets); preserve covenant headroom.
• Returns come from deleveraging, EBITDA growth, and multiple expansion-PE targets ~20-25% IRR or >2.0x equity multiple.
• Mitigate rate, covenant, refinancing, and execution risks by stress-testing scenarios; next step: build a 3‑scenario LBO model and an 18‑month liquidity plan.

Key participants and target criteria

You're sizing whether a business fits an LBO: the core question is can the company carry structured debt today and grow free cash flow tomorrow. Bottom line: buyers pick targets with stable EBITDA, predictable cash conversion, and clear levers to raise earnings-then layer financing so equity returns amplify.

Buyers

If you're the buyer or advising one, know the roles and practical asks for each capital provider. Private equity sponsors supply equity, set the 100-200 day plan, and drive exits. Banks and institutional debt funds (including direct lenders) provide senior secured loans and revolvers; mezzanine lenders and high-yield investors fill subordinated tranches and take higher coupons or PIK (payment-in-kind) instruments.

Practical steps and best practices:

• Map capital stack: target 20-40% equity, senior debt, and subordinated tranches.
• Pre-fund diligence: get credit-approved term sheets before exclusivity.
• Negotiate covenants: book a covenant cushion-aim for at least 1.5x headroom on interest coverage in the base case.
• Stress liquidity: insist on an undrawn revolver sized for 12-18 months of downside cash shortfalls.
• Lock fees and amortization: cap upfront fees and limit front-loaded amortization that kills early FCF.

One-liner: private equity brings the plan, lenders bring the math-get both signed before you close.

Targets

You should screen targets to the numbers and the story. Look for predictable cash flow, low cyclicality, defensible market position, and operational levers to lift margins. Quantitative thresholds I use: recurring revenue share >60%, customer concentration <20% for top customer, stable trailing 12-month EBITDA with volatility under 15%, and free cash flow conversion >40% of EBITDA.

Actionable evaluation steps:

• Model three-year FCF: base, +10% growth, and -20% downside scenarios.
• Run covenant test: debt/EBITDA and interest coverage across scenarios; reject if downside violates within 12 months.
• Check working capital: require DSO/DPO trends and a plan to normalize conversion within 6-12 months.
• Assess capex: capex/sales below historical industry median, or clear plan to reduce maintenance spend.
• Score operational levers: price, SG&A, sourcing, and digital adoption-assign attainable EBIT uplift targets.

Here's the quick math: if target EBITDA is $50m and you plan 4-5x senior leverage, there's room for $200-250m senior debt-so verify FCF covers interest and required amortization in year one. What this estimate hides: covenant tests, capex shocks, and bad customer losses can erase that headroom fast-so model them.

One-liner: you want a business that can carry debt and grow earnings.

Seller motivations

Understand why the seller wants out-motivation shapes price, reps, and transitional complexity. Common motives: non-core divestitures where management wants to focus, founder or family exits seeking liquidity, and public-to-private takeouts driven by activist pressure or undervaluation. Each motive implies different risks: carve-outs need TSAs (transitional service agreements), founder exits may leave key-person risk, and take-private deals require tight governance plans.

Steps, covenants, and best practices for managing seller-side risk:

• Require a clean carve-out schedule and an itemized TSAs for 6-12 months.
• Negotiate reps and escrows sized to the largest operational unknowns (often 5-10% of purchase price).
• Install earnouts only for measurable KPIs; avoid open-ended contingent payments.
• Plan for key-person replacements with retention packages or escrowed funds.
• Validate seller-provided financials with third-party quality-of-earnings and tax diligence.

One-liner: seller motives reveal the real risk-price for the unknowns, not the story.

Capital structure and financing mechanics

You're sizing financing for an LBO and need a clear playbook: who pays what, how much debt the company can carry, and which instruments match the cash-flow profile. Below I give step-by-step guidance, a worked example using FY2025 numbers, and practical checks you should run before you sign a term sheet. Keep this close to the model - the wrong mix costs IRR or triggers covenants fast.

Sources and uses: match money to needs precisely

Start by listing exact uses: purchase price, debt refinancing, transaction fees, working capital bridge, and a small capex/contingency reserve. Then map each source to a single use - equity covers fees and rollover, senior secured debt funds the core purchase, subordinated paper fills the gap. That prevents last-minute financing shortfalls.

Here's the quick math on a realistic FY2025 example: target LTM (last twelve months) EBITDA = $120,000,000. Entry multiple = 8.0x → Enterprise Value = $960,000,000. Uses: purchase $960m + transaction fees (~$29m, ~3% EV) = total $989m. Typical sources: senior debt = 4.5x EBITDA = $540m; mezz/sub-debt = 1.0x EBITDA = $120m; sponsor equity = remainder = $329m.

Best practices and steps

• Itemize uses to dollar, always include a 2-5% contingency
• Allocate fees to equity or add to debt explicitly
• Limit equity rollover to preserve sponsor alignment
• Run a sources & uses sensitivity for +/- 25% fee or working-cap shocks
• Action: Finance - build detailed S&U and funding waterfall by Friday

What this hides: timing differences - a $29m fee paid at close can create a temporary cash shortfall; plan the revolver draw for the first 90 days. This approach is defintely conservative on fees but practical.

Typical leverage and sizing: what the market will underwrite

Size leverage off FY2025 EBITDA and realistic covenant tests, not hope. Market norms in 2025: senior debt often sits around 4-6x EBITDA, with total debt up to 6-8x EBITDA in permissive pockets. Use the lower end for cyclical businesses, the higher end for stable, predictable cash flows.

Practical sizing steps

• Start with base senior capacity = 4-5x EBITDA for most deals
• Add subordinated/mezz to reach target total debt but cap total leverage at 6-7x for stress resilience
• Check post-close interest coverage (EBITDA / cash interest); target > 2.0x in base case
• Run downside where EBITDA falls 20-30%; ensure covenant headroom or springing remedies
• Action: Debt Desk - get indicative capacity and amortization profiles from 2 lenders in 3 business days

Quick rule of thumb: if senior debt needed exceeds 5.5x EBITDA, push for more equity or reprice expectations - higher leverage chips away at covenant flexibility and increases refinancing risk.

Debt types and structural mechanics: pick instruments that fit cash flow

Match instrument to volatility: use amortizing term loans for predictable cash, revolvers for seasonal working capital, high-yield bonds for bullet maturity and covenant flexibility, PIK (pay-in-kind) or mezzanine for equity-like risk where sponsors want to limit immediate cash interest. Know each instrument's cost and covenant profile.

Key debt categories explained in plain terms

• Term loans - secured, amortizing, priced typically at a spread to SOFR; primary workhorse
• Revolver - undrawn liquidity; expensive to draw but cheap to maintain; first line of defense
• High-yield bonds - unsecured, higher coupon, longer bullet maturities, good for refinancing risk
• Mezzanine/PIK - subordinate, higher all-in cost, useful to reduce sponsor equity but dilutive to returns
• Unitranche - single-layer debt blending senior and subordinated economics; simplifies docs but can cost more

Practical structuring checks

• Match amortization to free cash flow; avoid front-loaded amort where EBITDA recovery is expected later
• Secure at least 12-18 months of liquidity cushion post-close (revolver + cash)
• Prefer fixed-rate tranches or caps for a large variable-rate exposure in a rising-rate environment
• Negotiate covenant mechanics: maintenance vs incurrence, EBITDA add-backs, and excluded items
• Action: Treasury/Legal - obtain 2 term sheets (A/Bank and high-yield) and compare all-in cost, amort, covenants

One-liner: structure debt to maximize tax shield while keeping covenant headroom.

Valuation and returns framework

You're sizing the economics of an LBO and deciding if the price, debt, and operational plan can deliver the PE return hurdle. Below I map the valuation mindset, the four return levers, and the practical math you need to test any deal.

LBO valuation vs strategic M&A

In an LBO you value returns by the investor's cash yield over time, not by strategic synergies. The focus is on IRR (internal rate of return) and cash‑on‑cash (multiple on invested capital), while a strategic buyer prices for operating synergies and strategic fit.

Steps to value like a sponsor:

• Build a sources & uses and calculate sponsor equity required.
• Forecast free cash flow and a realistic debt schedule.
• Pick an exit multiple and hold period, then compute exit equity and IRR.
• Include fees, transaction taxes, and carried interest in equity returns.

Here's the quick math: equity multiple to IRR conversion-if $100 invested becomes $250 in 5 years, IRR ≈ 20% because (2.5)^(1/5)-1 ≈ 20%.

What this estimate hides: IRR is highly timing sensitive-interim dividends or recaps materially change IRR even if final multiple is the same. So always model cash flows and not just entry/exit equity.

One-liner: focus on IRR and cash-on-cash; time matters.

Return drivers

Four levers move sponsor returns: deleveraging (paying down debt), EBITDA growth, multiple expansion, and working capital efficiency. Model each separately so you can show what must go right.

Concrete steps and best practices:

• Decompose equity value change into three buckets: EBITDA growth, multiple change, net debt reduction.
• Run a waterfall: contribution = entry multiple × EBITDA change; multiple contribution = EBITDA_exit × (exit_mult - entry_mult); deleveraging = initial_debt - exit_debt.
• Sensitivity: shock exit multiple ±1x, EBITDA CAGR ±200bps, NWC % ±1 point.
• Stress: create base/up/down, then map which lever covers a 100-200bps IRR miss.

Numeric example (simple):

• Entry EBITDA = $50m, entry multiple = 8x → Entry EV = $400m.
• Initial net debt = $240m → Entry equity = $160m.
• Exit EBITDA = $75m (50% growth), exit multiple = 8x → Exit EV = $600m.
• Exit net debt = $100m → Exit equity = $500m; equity multiple = 3.125x; IRR ≈ 25.6%.

Decomposition (how the 3.125x was built):

• EBITDA growth contribution = 8 × (75-50) = $200m.
• Multiple expansion = 0 (no change in this example).
• Deleveraging contribution = 240-100 = $140m.
• Total equity uplift = 200 + 140 = $340m (160 → 500).

Working capital example: a 1% NWC release on $500m revenue frees $5m of cash - enough to cut a year of interest or accelerate debt paydown; small percent moves can materially affect IRR over 3-7 years.

What this estimate hides: operational execution risk and timing of cash collection. Deleveraging assumes consistent free cash flow; if growth requires capex, expected deleveraging may not happen.

One-liner: model returns from three levers-earnings, leverage, and valuation multiple.

Typical private equity targets and return goals

Most sponsors set a hurdle in the 20-25% IRR band or target > 2.0x equity multiple over the hold (commonly 3-7 years). Those targets define entry price, acceptable leverage, and the operational plan.

Practical checklist to test a target deal:

• Run a baseline five‑year model and ask: does base case reach 20-25% IRR or > 2.0x multiple?
• Calculate required EBITDA CAGR if no multiple expansion and minimal deleveraging.
• Test leverage sensitivity: can sponsor use 4-6x senior and total 6-8x debt while maintaining covenant headroom?
• Estimate interest cost and run interest-coverage ratios at +200bps and +400bps rate shocks.
• Define minimum operational commitments (margin uplift, capex limits, NWC targets) needed to hit the hurdle.

Here's the quick math to hit ~25% IRR: a roughly 3.0x equity multiple over 5 years gives ~24.6% IRR because (3)^(1/5)-1 ≈ 24.6%. So either grow EBITDA materially, secure multiple expansion, or rely on significant deleveraging.

What this estimate hides: market exits are binary-if exit multiple compresses by 1x, IRR can drop by several hundred basis points. Always show a downside where multiples fall and cashflows underperform; defintely model recaps only as upside.

One-liner: sponsors target 20-25% IRR or > 2.0x, and you need the math to show how each lever gets you there.

Next step: You - build a three‑scenario (base/up/down) LBO model with waterfall decomposition and an 18‑month liquidity plan by next Wednesday.

LBO financial model mechanics

Takeaway: build a model that links purchase funding to a realistic debt schedule, shows cash available for deleveraging and capex, and outputs IRR under base and downside scenarios-fast. Here's the quick math: for a target with $100m EBITDA, a 10x entry multiple implies a $1,000m enterprise value; with 5x senior debt and 7x total debt, equity starts at $300m.

Build blocks: sources & uses, pro forma income, debt schedule, cash sweep, capex, exit

Start with a clear Sources & Uses table that balances to the penny. Sources: equity, senior term loan, revolver, high-yield, mezzanine, fees. Uses: purchase price, transaction fees, refinancing, working capital build, capex reserve.

• Line up sources to uses exactly
• Model a pro forma income statement by month/quarter
• Build a debt schedule with term loan amort, revolver draw/repay
• Program interest accrual by tranche (cash vs PIK)
• Implement cash sweep rules and priority of payments
• Forecast capex by project and as % revenue
• Set exit mechanics: timing, exit multiple, deal fees

Example: purchase EV $1,000m, senior term loan $500m (amort 5% p.a.), second lien $200m, mezzanine $0m, equity $300m. Cash sweep of excess free cash flow at 50% materially shortens paydown and raises IRR. What this estimate hides: timing of interest resets and revolver seasonality can flip covenant outcomes-model monthly for year 1.

One-liner: the spreadsheet must map every dollar from funding to exit proceeds.

Key assumptions: entry multiple, revenue growth, margin improvement, capex, exit multiple, refinancing

Set transparent, defendable assumptions and tag a source for each. Typical ranges for sponsor models in 2025 market thinking: entry multiple 7-12x EBITDA, exit multiple +/- 1.0x, revenue CAGR 0-10% depending on sector, margin improvement 100-400 bps, maintenance capex 2-6% of sales, growth capex explicit by project.

• Choose entry multiple with comps and precedent deals
• Split revenue into price, volume, and churn
• Model margin actions: SG&A cuts, procurement, pricing
• Use unit economics to justify capex levels
• Assume refinancing options and timing

Quick example math: EBITDA $100m grows at 6% CAGR to $134m in 5 years. With a 7x exit multiple, EV = $938m. If net debt falls from $700m to $300m, equity proceeds = $638m, turning $300m equity into $638m (~2.13x). What this estimate hides: exit multiple moves +/- 1x can swing IRR by several hundred basis points-stress that assumption.

One-liner: pick assumptions that you can defend to a credit committee.

Stress checks: covenant tests, interest coverage, liquidity runway, base-case and downside scenarios

Build automated covenant and liquidity checks that flag breaches month-by-month. Common covenants: Net Leverage (Net Debt/EBITDA) and Interest Coverage (EBITDA / cash interest). Typical covenant floors at entry: Net Leverage ≤ 5.0x; Interest Coverage ≥ 3.0x. Also model minimum liquidity (cash + undrawn revolver) of 6-12 months operating needs.

• Run base, downside (-20-30% EBITDA), and upside cases
• Test a rate shock: +200-400 bps on floating debt
• Simulate revolver draws and covenant cures
• Model covenant cure actions: equity cure, asset sale, waivers
• Calculate liquidity runway in months

Example stress check: base EBITDA $100m, downside EBITDA $75m; with cash interest rising from $40m to $55m, Interest Coverage falls to 1.36x-that triggers default unless you have revolver headroom or a waiver. Mitigants: add fixed-rate tranches, step-up amortization, covenant baskets, or a committed accordion. If onboarding takes >14 days for key KPIs, monitoring and remedial actions get harder-defintely model monthly covenants for 24 months.

One-liner: the spreadsheet should show exactly when covenants bite and how exits hit IRR targets; Finance: build a 3‑scenario LBO model and an 18‑month liquidity plan by Friday (owner: Corporate Development).

Risks, mitigants, and operational playbook

Financial risks and practical mitigants

You're buying a cash-flow business that must service a big debt load; rates, covenant breaches, and refinancing windows are the top financial failure modes. Below I give the concrete steps you should take to stop the math from surprising you.

Key risks: rate rises that lift interest costs, covenant breaches that force defaults, and refinancing risk when term debt matures in a tight market. Here's the quick math to keep front of mind: if a target has $150 million EBITDA and you load 5.0x senior debt (= $750 million), an average coupon move from 8% to 10% lifts annual cash interest from $60 million to $75 million, cutting interest coverage from 2.5x to 2.0x.

Concrete mitigants and steps

• Lock fixed-rate tranches-swap or term-rate locks for at least 50-70% of expected term debt cash interest.
• Build revolver capacity sized to cover 12-18 months of downside cash shortfall; target revolver = 10-20% of trailing EBITDA as a starting rule.
• Negotiate covenant headroom: set maintenance tests with buffers (interest coverage covenant floor 2.0-2.5x, net leverage floor > covenant by 0.5-1.0x).
• Include amendment and cure language and short-term liquidity baskets for working capital and restructuring.
• Stress the debt schedule: run a 24‑month roll-forward showing amortization, maturities, and optional pre-payments; flag any refinancing need in months 12-36.
• Use staged equity reserves: hold back a small liquidity equity tranche (3-7% of enterprise value) for downside support or to fund capex without covenant waiver.

What this hides: hedging costs and swap counterparty terms-price them into the model and concede swap basis risk if you use cross-currency swaps.

Operational risks and the 100-200 day playbook

You can't debt your way out of bad operations. If execution slips, covenants will bite and refinancing becomes impossible. Use a tight operational plan to convert risk into predictable wins.

Top operational failures: integration hiccups, missed efficiency targets, and revenue deterioration from losing key customers. The antidote is a crisp 100-200 day plan with measurable KPIs, owners, and weekly gates.

Concrete 100-200 day steps

• Day 1-30: stabilize-confirm cash collections, key vendor terms, and top 10 customer retention. Owner: COO.
• Day 30-90: quick wins-SKU rationalization, lift gross margin by 200-400 bps, reduce discretionary spend by 5-8%. Owner: Head of Ops.
• Day 90-200: scale changes-implement pricing optimization, improve working capital (DSO down by 5-10 days, inventory turns up by 10-20%), and automate monthly reporting.
• Set weekly KPI dashboard: EBITDA, free cash flow, DSO, inventory turns, customer churn, NPS (net promoter score).
• Assign single accountable leader for each KPI; run weekly 30‑minute operator standups with a 5‑point red/amber/green scorecard.
• Pay for performance: tie management LTIP (long-term incentive plan) to absolute cash flow and covenant-friendly milestones, not just EBITDA.

Example metric trigger: if consolidated cash falls 15% vs plan within 60 days, auto-activate a defined austerity package (freeze hiring, suspend non-critical capex).

One clean line: make the first 100 days about cash and customer retention, not grand strategy-do the basics well, then scale.

Macro risks, stress-testing, and liquidity planning

Macro shocks (recession, faster-for-longer rates) will expose leverage. You need scenario math, clear triggers, and an extended liquidity runway before you sign.

How to stress-test and what to model

• Run three scenarios: base, downside A (shallow recession: EBITDA -20% for 12 months), downside B (deep stress: EBITDA -35% for 18 months).
• Project monthly cash flow for 18-24 months including debt service, capex, and working capital swings; include committed revolver draws and covenant breakeven months.
• Calculate liquidity runway = cash + undrawn revolver - cumulative negative free cash flow; require runway > 12 months in downside A and > 6 months in downside B.
• Model covenant roll-forward under each scenario and identify the first month a breach occurs; then run an action ladder for each trigger month.

Practical mitigants tied to stress outcomes

• Extend revolver tenor or pre-commit to an accordion facility during diligence; ask lenders for an underwriting of downside cashflows.
• Agree a capex and dividend blocker in covenants to prevent discretionary cash leak in stress.
• Secure bridge or backstop commitments from sponsor or committed equity line for at least 3-6 months of shortfall.
• Price contingencies: model covenant cures and amendment fees into your deal IRR to see true economics.

Quick example math: starting cash $50 million, undrawn revolver $100 million, projected negative FCF over 12 months in downside A = $120 million. Liquidity runway = $30 million (breach unless sponsor injects equity or you increase revolver by $20-40 million).

What to watch: markets tighten fast-if competitor LBOs are refinancing in the same 12-24 month window, pricing and covenant terms will shift quickly.

Hedge the most likely failure modes, not the fanciful ones.

Next step: Finance: draft a three‑scenario LBO model and an 18‑month liquidity plan showing covenant roll‑forward by Friday; Ops: deliver a 100‑day playbook with owners for the top five KPIs by the same date.

An Overview of Leveraged Buyout Methodology - Final checklist and next steps

Recap: LBOs align debt, operations, and exit timing to amplify equity returns

You're about to close the loop on an LBO model and need a tight statement of what actually drives value. The direct takeaway: LBOs amplify equity returns by buying predictable cash flows, layering debt to boost return on equity, improving operations to grow EBITDA, and timing the exit to capture multiple expansion or realized growth.

Focus three things: capital structure, operational value-creation, exit mechanics. Capital structure means matching debt tranches to cash-flow timing (senior revolver for seasonality, term loans for stable amortization). Operations means a 100-200 day plan with 3-5 KPIs tied to EBITDA or margin uplift. Exit means setting realistic timing-typical hold is 3-7 years-and running sensitivity on multiples at exit.

Here's the quick math: a business bought at 7x EBITDA with 5x leverage, 5% annual EBITDA growth, and a reduction in net debt over the hold can produce a > 20-25% IRR to equity-if covenants hold and exit multiple stays level. What this estimate hides: refinancing costs, working capital swings, and a recession-year EBITDA drop.

One-liner: LBOs marry the right debt with a clear operations plan and a realistic exit timeline to magnify equity returns.

Decision checklist: stable cash flow, achievable operational improvements, covenant flexibility, realistic exit

You need a short, actionable yes/no checklist before you commit capital. Use this to gate diligence and term-sheet work.

• Cash flow predictability - recurring revenues, predictable seasonality, low cyclicality
• EBITDA size and margins - enough scale for 4-6x senior leverage economics
• Free cash flow conversion - clear path to convert EBITDA into cash for interest and amortization
• Operational delta - 12-36 month initiatives that can lift margins by a visible % (pricing, SG&A, procurement)
• Covenant headroom - modeled interest coverage > 3.0x in base, with breach scenario tests
• Refinancing path - market access or sponsor capital for roll/refi at exit
• Exit clarity - 3-7 year plausible buyers (strategic, PE, or high-yield market) and realistic exit multiple
• Liquidity buffer - minimum committed revolver cover for at least 12-18 months runway in downside

Best practice: convert each checklist line into a numeric test in your model (eg. coverage ratio, FCF conversion %, margin uplift target). If any single test fails in the downside, stop and redesign the deal.

One-liner: you want a business that can carry debt and grow earnings under stress, not just in theory.

Next step for you: build a 3‑scenario LBO model (base/up/down) and an 18‑month liquidity plan

You should move from concept to an executable checklist and a concrete model. Start with these deliverables and owners.

• Model build - Finance: produce a 3-scenario LBO workbook (base/up/down) with monthly cash flow for first 18 months and annual years out to exit.
• Tabs required - Sources & Uses, Pro forma P&L, Debt schedule (tranche-level), Monthly cash waterfall, Covenant tests, Sensitivity matrix, Exit calculation.
• Key assumptions - entry multiple, revenue CAGR, margin improvement (bp), capex schedule, working capital % of revenue, refinancing fees.
• Stress tests - run rate shock (-20% EBITDA), interest-rate shock (+300 bps), delayed exit (-2 turns). Show covenant breach dates and cure options.
• Liquidity plan - Treasury: draft an 18-month liquidity plan that lists committed facilities, expected draws/repayments, minimum cash target, and contingency sources (asset sales, sponsor backstop).
• Decision metrics - equity IRR, cash-on-cash multiple, downside equity value, probability-weighted return table.
• Timeline & owners - Model by end of week (Finance), 18-month liquidity plan by next Wednesday (Treasury), Ops to deliver 100‑200 day playbook in 7 business days.

Here's quick math for the liquidity check: if monthly cash burn is $6m and committed revolver is $50m, runway = ~8 months before additional actions; add a 6-12 month buffer for safety. What this hides: covenants can accelerate repayments and cut access to the revolver.

One-liner: draft the scenarios, show when covenants bite, and map specific cures so you're not surprised.

Owner: Finance - draft the 3‑scenario model and Treasury - deliver the 18‑month liquidity plan; both due by the dates above.