TURNAROUND MANAGEMENT AND INTERIM MANAGEMENT

Business Turnaround / Corporate Recovery

Turnarounds involve saving an insolvent or potentially insolvent business from terminal insolvency procedures, and returning the business to a stable financial and operating position. This is achieved at the same time as maximising creditors' interests and wherever possible the interests of employees, managers and owners.

Business Turnarounds usually involve three component parts:

Crisis management
Additional or replacement finance
Insolvency skills and experience to restructure a company

Our Approach as Turnaround Specialists

We apply experience and methodologies developed through managing many start-ups, large companies and business turnarounds to identify the cause of the pending financial failure and implement a workable and realistic plan to prevent the failure recurring . The advantages of engaging us on turnarounds are:

Fast diagnosis of state of affairs;
Quick action to maintain company viability;
Interim management;
Financial restructuring;
development and implementation of long-range solutions to the problems that created the crisis, including interim management recovery be possible.

As turnaround specialists and interim managers to small business, we provide expert services, including insolvency, corporate restructuring, crisis management and access to turnaround finance specialists.

We begin with a quick diagnosis to determine the landscape and areas requiring most immediate attention. In addition to the experience we bring to the engagement we utilize a number of tools however, our focus is on fundamental analysis. The objective is to pinpoint primary problem and to develop turnaround strategy.

While the diagnosis is in process, obvious problem areas are dealt with expeditiously, to maintain viability and provide evidence of action to creditors and suppliers. This usually involves assuming an interim management role.

It is especially important that the management and board of directors realize that their fiduciary responsibilities change during this period. Instead of the board of directors representing the interests of shareholders, they start representing the interests of the creditors if the company is in the "area" of insolvency, which is usually the case.

Turnaround Finance

An important part of a turnaround generally involves restructuring all the company’s financial arrangements. We will consider the most suitable turnaround finance applicable and contact our network of turnaround finance specialists.

The turnaround finance specialist will carry out their due diligence to establish value, security, future profitability, risks etc before agreement is reached on the funding package.

Turnaround financing include:

Equity;
Factoring, Invoice Discounting, Trade finance
Stock financing
Asset financing
Debt financing

Negotiations With Creditors

Creditors are very important to a successful turnaround, we therefore identify from the outset:

Which creditors are likely to take action and whether that action will have a material effect on the outcome of the turnaround?

       For example

Whether the company’s bankers with a floating charge will continue to support, or will they make a formal demand and appoint an Administrative Receiver?
What outstanding judgments and winding up petitions?
Whether the landlord will exercise distraint?
The position of crown creditors?
The level of support of employees?

Which creditors are crucial to the ongoing trading of the       business, and whether immediate non-payment will have       an adverse impact on the company’s ability to trade?

How the creditors are “dealt with” will depend on the financial circumstances of the deal and the quantum and character of the turnaround finance available.

Once the immediate problems are addressed, we then turn to developing a long-term survival strategy. This involves developing the vision and mission for the business and then implementing a viable operating plan for the next eighteen months.

Interim Management

Very often the management is the cause of the crisis. This may not be intentional, but it is unlikely that the existing management would have the experience to lead the turnaround. In order for the restructured business to steer a path towards realising its goals it is often necessary to install an experienced interim manager or interim management team until a permanent replacement is found.

As part of the turnaround, other remedial action to deal with management deficiencies should be taken. These remedies may include one, or a combination, of the following:

Coaching or retraining of existing management;
Additional management to supplement the existing        management team
Replacement management.

Very often management, rather that appointing turnaround consultants who are turnaround specialists, make attempts to save their under performing businesses, with varying degrees of success.

For a free initial consultation on business turnaround and interim management contact now