Accelerated business sales
To achieve a successful turnaround you need to draw on a range of specialist skills. Unlike some others, we work closely with our colleagues in other specialist departments, like corporate finance and transaction support, to help deliver the best result.
We can help businesses explore the options for a business sale as a means to realise value for shareholders as well as securing the future of the business.
The key to this is acting at an early stage, while there is time and the available cash, to implement this sort of strategy.
Refinancing
Although it is unlikely that borrowing more is the answer to every problem, ensuring a business has the right finance in place, and can maintain it, will be a critical issue.
We have assisted business in negotiating with their existing funders and in seeking new ones.
In the current difficult market who you approach and how you do so can make a real difference.
Key stakeholder Negotiations
There are certain creditors that should never be ignored:
The Bank
HM Revenue & Customs; and
The landlord.
Rather than waiting for the worst to happen we can work with management to present a positive plan to key creditors, explaining how and when debts can be repaid.
Often this will be crucial for giving the business the breathing space it needs to implement a turnaround.
HMRC in particular are taking a less generous line than they have in the past.
Creditor arrangements
If possible we will seek to assist management in negotiating informal arrangements. Where this is not possible (because creditors like HMRC wish to have additional safeguards) we do specialise in Company Voluntary Arrangements (“CVA”s).
They work on the basis creditors will be better off voting for the CVA compared to Liquidation. Once agreed by 75% of creditors at a general meeting the proposal (which is monitored by a supervisor) is binding on all creditors.
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| Advantages
- Provides the Company with cashflow and time to implement a turnaround plan
- Directors remain in control of business which continues to trade;
- Creditors may be more likely to agree to write off part of their debt if they know all creditors are being treated equally.
- Crown may be more likely to agree as there are clear terms which the company must comply with
Disadvantages
- There is some cost involved in preparing the proposals (although typically less than the cost of Administration or liquidation)
- It is admitting to creditors the company is insolvent, so if they don’t agree, trading on may be difficult.
- It has no impact on the position of secured creditors like the Bank.
Professional Partnerships
This is a difficult area where getting advice early is critical.
We are always focused where possible on turnaround, helping a business to survive without the need for formal insolvency procedures, which can be very destructive to value, particularly for professional partnerships.
We can advise on
- Preparing a turnaround plan
- Forecasting and cashflow management
- Negotiating with key creditors and other stakeholders
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