Financial Restructuring
Assessing strategic options; analysing stakeholder interests in alternative scenarios; developing restructuring plans; facilitating negotiation.
Your client’s business might be profitable or there may be a reasonable prospect that its fortunes can be turned around - but it could actually or potentially be insolvent. If this is the case, financial restructuring may be desirable, involving matters such as:
- Converting existing debts to equity
- Converting preference shares to ordinary shares
- Debt subordination
- Debt compromise
- The sale of existing debts or equity to more supportive new owners
- Accelerated sale of a business/part of a business – or purchase of another business
- Raising new money
For such a process to be workable, all interested parties must believe that financial restructuring will put them in a better position than if the company were to be put into immediate liquidation. The detailed steps towards achieving successful financial restructuring are:
- Analysis of the business and its prospects
- Reviewing the chances of success for any operational turnaround plan requiring implementation, once financial restructuring is completed
- Review of restructuring options
- Assessing the likely recovery of moneys owed to each class of stakeholder in the event of liquidation
- Development of a restructuring plan
- Development of a negotiation strategy that will ensure each stakeholder group agrees to restructuring
- Identifying new fiscal requirements and raising the required money
We can act as financial advisers throughout this entire process, acting either for your client or for stakeholder groups. When acting for the company, we can manage the whole process, whilst also providing necessary day-to-day support. We will also continue to maintain an open dialogue with key stakeholders to retain their trust and confidence. In more complex circumstances or where management resources are already overstretched, we may temporarily appoint a Chief Restructuring Officer who can focus solely on restructuring and turnaround, leaving the company’s management team to focus on running the business.
