Crisis, restructurings and restatements

Economic uncertainty, heightened global competition, evolving government regulation, and rapid technological changes can prove challenging for many companies. The enduring risks posed by forces like market downturns, competitive pressures, missed opportunities, strategic blunders or structural events are inherent to the trade. Business setbacks bring underperformance, declining earnings, and liquidity and cash-flow blockages. Financial and operational underperformance does not always signal the beginning of the end for distressed companies. Decisive and timely actions, with the benefit of advice from experienced professionals, can begin a successful turnaround of the business that refocuses strategy and ultimately creates value for stakeholders.

“It’s critical for companies to quickly identify key indicators of distress in order to quickly and effectively take action that will preserve value for all stakeholders.”Perry Mandarino, US Business Recovery Services Leader
 
PwC Deals Principal, Perry Mandarino, US Business Recovery Services Leader discusses the state of restructuring

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Watch PwC's Deals Practice webcast, "Business Recovery Services - creating opportunities in a challenging energy sector."

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PwC Deals Principal, Steve Fleming, Business Recovery Services discusses healthcare providers

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PwC Deals Managing Director, Bill Fasel, Business Recovery Services discusses the Industrial Products sector

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From turnaround and restructuring plans to optimized exit strategies, PwC’s recovery specialists advise on solutions for a range of needs. We work with you to evaluate strategic and financial alternatives. We can also assist you with corporate reorganizations, evaluate your liquidity positions and advise on operating efficiency and margin enhancement. Wise business leaders prepare for the unexpected, and it’s never too early to prepare.

See below for our focus areas and capabilities

Liquidity constraints

  • Liquidity becomes constrained limiting a company's ability to operate efficiently

Liquidity and cash management

  • Development of short-term cash forecast
  • Aggressive cash management and cash preservation
  • Liquidity enhancement
  • Working capital assessment
  • Supplier and customer reviews

Covenant default

  • Imminent covenant defaults lead creditor groups to organize and renegotiate terms and conditions of credit agreements

Covenant relief and negotiations

  • Evaluation of pro forma debt capacity
  • Restructuring existing debt
  • Recapitalizing per new business plan
  • Raise new debt and equity financing

Overleverage

  • Overleverage and looming debt service payments trigger concern and trepidation from key creditor constituents

M&A/transactions

  • Assess non-core asset disposal and monetization strategies
  • Deal process and marketing coordination
  • Negotiation and execution of LOIs, term sheets, asset purchase agreements and POR
  • Deal financing
  • Post-merger integration

General economic weakness

  • General economic weakness can lead to a deterioration of profitability

Capital structure solutions

  • Evaluation of pro forma debt capacity
  • Restructuring existing debt
  • Recapitalizing per new business plan
  • Raise new debt and equity financing

Operational inefficiencies

  • Operational challenges and inefficiencies, combined with a lack of internal controls can lead to a deterioration in performance

Operational improvements

  • Efficiency improvement
  • Process streamlining
  • Cost reduction initiatives
  • Organizational effectiveness
  • Supply chain optimization
  • IT modernization

Business model challenges

  • Volatility in raw material and energy prices can cause unforeseen business model challenges and margin compression
  • Failure of a company’s business model to accurately forecast results can lead to credibility issues

Strategic alternatives and business planning

  • Strategic review of business
  • Corporate turnaround management
  • Development of long-term business plan
  • Execution of turnaround strategy