Financial restructuring

In some circumstances, either the total financial liabilities of a company are too large, or the profile of the liabilities is so inappropriately structured, that the company will not be able to meet them as they fall due.

In this situation management teams can be tempted to try to restructure their liabilities to certain lenders hoping that business will recover in time to allow them to meet their liabilities to others.

Typically this only delays the inevitable. Often the only solution that will ensure the survival of the company is wholesale financial restructuring. This will require a comprehensive, detailed and achievable business plan. Once a realistic business plan has been agreed with management a restructuring proposal needs to be developed which should represent a better solution to each of the stakenholders than the alternative. We work with management teams to assist in the development of business plans, restructuring plans, and bank negotiations to perform a comprehensive financial restructuring.

Independent business reviews

Our IBR service provides lenders with a clear and objective view of the borrower’s current and projected debt service capacity.

We review and challenge management’s commercial and financial assumptions and provide the lender with a realistic picture of what the company can achieve. Key benefits of an IBR include:

01

real multi-level challenge to management forecasts: commercial, operational and financial

02

realistic set of “post-vulnerability” numbers to baseline and track future performance

03

risks / upsides are fully evaluated

04

“close-up” assessment of the business and strength/depth of its management team

05

reliable basis for valuation / options review

06

business briefing facilitates communication to multiple stakeholder groups/syndicates

Company business reviews

When we perform a company business review on behalf of the management or shareholders of a business.

We perform a comprehensive analysis of the business’s current financial position, its historic and future commercial operations and the future financial performance that it is likely to achieve.

The analysis is usually used when a business is in a position of financial distress to identify how readily the business can meet its financial obligations and to recommend real courses of action which will assist it in doing so. It is a very practical exercise where the financial consequences of various actions will be examined and discussed. Management teams can therefore use it as a blueprint for ensuring that they take the most appropriate course of action to avoid an event of default.

Liquidity reviews

Companies can often go into financial distress despite being profitable due to a lack of free cash. 

We can quickly assess and analyse the drivers of cashflow, for example; trading performance, working capital, restructuring costs or provision payments.

This allows us to identify intra month peak requirements, vulnerabilities and potential upsides e.g. reducing the inventory days to generate asdditional cash. We use this knowledge to provide lenders with an independent view on whether the borrower has adequate liquidity to continue operating normally and thus enable them to decide on how to manage their financial liabilities.

We will help you every step of the way

“Give me six hours to chop down a tree and I will spend
the first four sharpening the axe.”

Abraham Lincoln