Financial Restructuring
" If the business is profitable or, if not, there is a reasonable prospect that its fortunes can be turned around, but if it is actually or potentially insolvent then a financial restructuring may be desirable "
This could involve a combination of the following:
- Converting existing debt to equity
- Converting preference shares to ordinary shares
- Debt subordination
- Debt compromise
- The sale of existing debt or equity to new owners who are more supportive
- Raising of new money
For such an exercise to be workable the resulting position of each interested party must, on a reasonable expectation, put that party in a better position than he believes he would be in an immediate liquidation.
The key steps that need to be undertaken, assisted by professional advisers, are:
- Analysis of the business and its prospects
- Review of the prospects of success of any operational turnaround plan required to be implemented once the financial restructuring is completed
- Review of restructuring options available
- Analysis of the likely recovery for each stakeholder class in the event of liquidation
- Development of a restructuring plan
- Development of a negotiation strategy for obtaining the agreement of each stakeholder group to the restructuring plan
- Identification of new money requirements and raising these
We act as financial advisers throughout this entire process acting either for the company or for other stakeholder groups.
Where acting for the company we would generally manage the whole process and provide management with whatever other support they require. We would also continue to maintain an open dialogue with key stakeholders in order to maintain their trust and confidence.
The earlier an under performing business is identified
the better the outcome
In the first instance contact us immediately to arrange a free consultation.