Business Rescue
If your business has a viable future, despite your current
difficult financial difficulties, you may be able to ‘trade
out’ of your situation. We can advise you how to secure some
‘breathing space’ to review your business strategy,
markets and operation, which may help to secure your business’s
long-term survival.
A business rescue package is designed to save your company so
that it can trade its way out of difficulties and back into
profit. It usually involves three major processes of:
Understanding and addressing reasons for difficulties;
assisting with cash management; managing working capital;
supporting and managing stakeholder needs.
- Financial Restructuring & Refinancing
Assessing strategic options; analysing stakeholder interests
in alternative scenarios; developing restructuring plans;
facilitating negotiation.
Refinancing usually involves raising additional finance,
either against the assets of the business and/or in the form
of an equity stake in the business. We will help you examine
whether this is the right approach for your business and if
so, explore the different options which will be of most
benefit.
Working with the business and stakeholders to identify the
causes of under-performance; planning a strategy to achieve
improvement.
When a company reaches the stage where formal insolvency
procedures must be instituted, the primary objective for the
licensed insolvency practitioner is to realise the greatest
return for the company’s creditors. Depending on the stage at
which the company realises it is in trouble, the best return is
almost always most successfully achieved by keeping the company’s
business operating. This enables two possibilities: either the
business can continue to operate and generate cash for the
creditors, or it can be sold on as a going concern.
Companies that can be sold on as going concerns almost
always have a much higher realisable value than the liquidated
assets of the company or its businesses, and therefore provide
greater returns for the creditors. Often however a company is
hopelessly insolvent and beyond saving. In such cases,
liquidation is the only option.
The most widely used mechanism for achieving business rescue is the
company administration procedure.
Company Voluntary Arrangements may also be used as vehicles for business rescue, whereas
liquidation is a terminal process for the company and usually
marks the end of the business activities.
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