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In this uniquely challenging environment, how can you make your business more resilient? The rapidly-changing COVID-19 picture means one false move can seriously impact corporate performance and value.

Here are some considerations for:

  1. turning things around rapidly
  2. overcoming financial difficulties
  3. coping with distressed situations

How to rapidly turn things around

Your first priority is to quickly stabilize cash and liquidity and take a realistic view of current options.

This means identifying and acting on opportunities for strategic, operational, organizational and financial change. Establish solid ground for a turnaround by assessing your liquidity position and creating a stakeholder management plan.

Five key steps turning things around:

  • Identify options: quickly and effectively assess your options
  • Stabilization: steady the business and assess its financial position
  • Turnaround strategy: calculate financial paybacks of various options
  • Execution: ensure full delivery of the turnaround plan
  • Value realization: understand risks and costs of each option, including contingency plans

How to overcome financial difficulties

COVID-19 is likely to produce distressed situations, where stakeholders often seek additional information or resources to help rebuild their confidence. By understanding the needs of borrowers, lenders and shareholders, and managing stakeholder communications, you can stay on top of issues and make informed decisions. You should assess short-term liquidity requirements and find ways to quickly preserve value and address potential risks to stability.

Corporate restructuring: six questions

To help achieve sustainable operational and financial change:

  • Appraisal and stabilization: Do I have enough liquidity to keep operating?
  • Options assessment: Do I know what has gone wrong and how to fix it?
  • Intra-stakeholder negotiations: How do I keep everyone engaged in negotiations?
  • Development of options: What sustainable capital structure offers the best prospect of success?
  • Implementation: How can I reconcile all stakeholder positions to implement the new capital structure?
  • Ongoing monitoring: How do I ensure that the business is supported through its recovery?

Managing distressed situations

If your business has become distressed due to COVID-19, your first step should be to assess the situation and develop a practical insolvency plan. Working with your advisors and stakeholders, identify the path to maximize available value. Assess the impact and risks of various options, identify the right filing jurisdiction and prepare a detailed insolvency plan that optimizes stakeholder positions.

Five key recovery scenarios

  • Distressed corporates: understand the extent of the problem
  • Insolvency planning: Identify your options
  • Commencing insolvency: understand what happens in a formal protection process
  • Implementation: find ways to maximize value
  • Exiting a formal process: plot a path back to 'normal'

 

For more detail, or for help to guide your through one of these processes, please contact Blair NimmoAngel Martin TorresMark Raddan, or one of our advisors.