Business Recovery Services
Regaining control • Rebuilding value • Resolving crisis
With the demands placed on organisations in our rapidly evolving marketplace, it is not surprising that increasing numbers of them run into difficulties at some point in their life cycle. There are many reasons why an organisation may find itself facing financial difficulties: a tough economic climate, changing markets and competitors, outmoded technology, and operational or strategic planning deficiencies. Whether these factors occur in isolation or converge, they can trigger a host of problems, including underperformance, declining earnings, liquidity and cash flow concerns, and stakeholder pressure. Left unchecked, the results can be serious, and sometimes irreversible.
Companies often exhibit symptoms of decline well before a crisis erupts. In many cases, a downward financial spiral is not inevitable. It can be arrested and reversed. Early detection and swift, decisive action are the keys to restoring performance and value. That is why timely expert advice is critical.
Meeting Your Needs
PwC’s business recovery specialists can help you chart the most efficient course by identifying countermeasures, implementing focused realistic strategies and assisting in communicating with stakeholders. Our wide range of expertise, combined with our access to an unrivalled global network, gives us a depth and breadth that no other firm can offer.
We have a proven track record for helping companies:
Independent Business Reviews
When an organisation is underperforming, in distress, or in crisis, the resultant uncertainties present stakeholders with difficult decisions. To facilitate the decision-making process, an Independent Business Review could be carried out. This involves a review of a threatened or seriously underperforming business by professionals experienced in working in turnaround situations or an intensive care banking context.
PwC will undertake a tailored, objective and rigorous review to scrutinise financial performance, operating dynamics, strategic and market positioning, asset deployment and management issues. This is followed by identifying a range of immediate and long-term options.
For organisations that are financially underperforming, and lenders or other stakeholders, PwC delivers restructuring solutions designed to build a platform for swift recovery and sustained future success. We thoroughly assess all revitalisation options, develop a plan of action in partnership with management and mobilise the resources required for effective implementation. Our goals are to rebuild trust between the business and its financial stakeholders, and to develop a targeted action plan for business improvement, simplification or divestment which involves:
- Stabilise crisis situations
- Preserve and protect value
- Identify and implement timely, viable action plans
- Enhance operations
- Renegotiate and restructure debt
- Rebuild shareholder confidence and value
PwC can also assist the company to garner support from financial institutions and communicate with all stakeholders to implement the restructuring plan effectively.
When a business is facing severe financial distress, we may be able to orchestrate a turnaround – if action is taken early enough. However, when turnaround is not possible, we can help clarify available options, minimise loss exposure and maximise returns in an insolvency.
- Operational Restructuring
Benchmarking key operating parameters to assess areas where immediate improvements can be made, developing strategies to make these improvements and providing the necessary project management thrust to ensure that these strategies are duly implemented.
- Financial Restructuring
Analysing earnings and cash flows that are sustainable into the future (often in conjunction with Operational Restructuring), so as to determine the level of debt that the business can sustain upon restructure. This will also take into account debt service and covenant requirements, plus the need for sufficient financing headroom, where possible.
Local Public Listed Company
- Debt Restructuring and Repayment Negotiations
A public listed company was facing significant cash flow difficulties due to over gearing which was made worse by the economic downturn in the construction industry. There was significant pressure from creditor banks to reduce the level of outstanding debt.
PwC was subsequently appointed as IFA to the company to advise on a debt restructuring scheme and to assist the company in repayment negotiations with its creditor banks, comprising three local and two foreign banks. The team successfully completed the restructuring exercise with the full repayment of all existing banks debts. The company subsequently went through a rights issue exercise which resulted in a more sustainable gearing ratio.