Many companies today are experiencing serious financial difficulties which would require significant restructuring measures. If issues are identified and recognized early enough and provided that shareholders, creditors and management are aligned behind a restructuring strategy, the company may go through an out-of-court restructuring process. Such an approach is beneficial to all parties involved as results are maximized and timely achieved via a quick and effective reaction for resolving the root causes.
Our main objective as advisors through the restructuring process is to set the scene for negotiations and alignment of all the important stakeholders acting as an independent mediator. By using, during all stages or at any necessary step in the process, our multi-disciplinary integrated team, with proven expertise and experience in restructuring, we aim to bring to you the highest quality service at every stage of the process and in all substantial aspects which your business is facing. Our prompt reaction will help achieve the quick wins as well as your ultimate goal – owning, managing, and working with a sound, viable business.
The typical restructuring process involves a series of stages which, depending on the actual status of the company, may also be looked at separately.
- Short term cash flow
- Business review
- Restructuring option analysis
- Restructuring plan development
- Negotiation support
- Implementation support
- Monitoring
This is the step where the “bleeding” of a distressed business should be stopped or at least reduced to controllable levels.
- We assess the reasonability of short term (13 weeks) forecasted cash deficit and comment on the underlying assumptions of the forecast, including in the report: quantification of the cash deficit, sensitivity analysis of the cash flows, presentation of the risks and vulnerabilities of the cash flow forecast;
- We recommend ways to improve cash flow management such as: prioritizing expenditure, reducing spending in non-critical areas, re-negotiating supplier contracts, managing receipts from clients, negotiating payment terms.
This is the stage where a medium to long term solution is assessed and decided upon by creditors, shareholders and management.
- We provide an unbiased opinion with regards to the company’s financial and business prospects, covering de following areas: historical analysis of the business, current financial position, analysis of the business plan, prioritizing options available;
- A business review may result in several options, such as: turnaround, refinance, reconstruction of balance sheet, controlled wind down, accelerated M&A, insolvency;
- If there is no sufficient time for a full-blown business review, we can support you with analyzing options based on the information available. This approach is suitable when a rapid decision regarding the future of the business must be taken;
- Our focus will be to point out the advantages and drawbacks of each identified option following a high level review of the company’s business;
- However, such an approach has certain inherent limitations given by potentially insufficient sounding of the solution as compared to a full business review.
Restructuring plan development
- This involves setting up the detailed steps to be followed during the process of restructuring the business and its operations;
- We will focus on identifying the most appropriate methods for improving management of overheads, operational restructuring and process improvement, setting specific milestones which should be monitored during the plan period, suggesting specific and measurable key performance indicators;
- The plan must then be agreed upon by creditors, shareholders and management in order to have the necessary buy-in from all stakeholders.
- We have extensive experience during various phases of negotiations between businesses in financial distress and finance providers;
- We can act either as an independent party facilitating the process, or acting alongside you as your agent in order to reach the optimum deal for you and your business;
- Subsequent to the approval of a restructuring plan, we can provide implementation support, working together with management during the implementation phase;
- We can take either an active management role, being involved in taking decisions or we could act as advisors in the implementation process;
- Monitoring activities are needed when a restructuring plan is set in place and stakeholders require a certain degree of comfort as to whether or not the actual performance of the company reflects the requirements of the plan;
- Our role will be to observe the achievement of certain milestones and advise management in due time to take corrective actions in respect of any deviations from the plan;
