Performance improvement of underperforming overseas subsidiaries
<Examples of consultation>
- Our overseas subsidiaries have continuously generated losses. It appears that various measures had already been taken locally, but their performance has not improved. The financial institutions are also skeptical about our ability to turn the situation around and if this situation continues, we may face difficulties in cash flow management.
- Our overseas subsidiary is underperforming. Its management has explained the reasons for the underperformance, but not clearly enough. The business management and governance of the subsidiary are weak and unclear, and thus some kind of action is necessary.
<Details of our support>
- Understanding of overall management conditions and identifying the real management issues (clarifying the true causes of losses)
- Clarifying the direction of management improvement in order to improve business performance
- Consensus-building among stakeholders (e.g., key business partners, management and employees, financial institutions, major shareholders) regarding the direction of management improvement
- Supporting the implementation of improvement measures involving local members
- Establishment of a system enhancing business management to stabilize business performance
Reorganizing overseas JVs
<Example of consultation>
- Although we started a JV with a local company, its business performance has been well below the original business plan. We would like to consider our future direction, but since the management of the JV has been fully delegated to the JV partner we do not really know the actual business conditions of the JV. As a result, we are unable to make any management decisions.
<Details of our support>
- Confirmation of the actual status of the target business and identification of issues
- Reevaluation of the future potential of the JV and redefinition of its objectives
- Clarification of future JV policies, including capital reorganization and withdrawal, and support in negotiations
- Drafting and implementing profit improvement plans in the event of the JV continuing
Accelerated simplification or reorganization of overseas subsidiaries
<Example of consultation>
- One of our overseas subsidiaries, which was established more than 10 years ago, has been continuously generating losses. The initial objective of establishing this entity has already been achieved and we are considering withdrawal. We would like to have expert advice on employee issues, estimation of withdrawal losses, tax issues, etc.
<Details of our support>
- Scenario analysis of continuation vs. discontinuation (pros & cons)
- Support for a feasibility study and implementation of a disposal (or sale of the equity) of the business
- Discussion of exit process and estimation of financial and tax impacts
- Support for implementation (including support for negotiations with the authorities)
Debt-capital advisory regarding project finance
<Example of consultation>
- We have been participating in an overseas resource infrastructure project as a lender, but there is a serious delay in the construction of the plant and it is expected that the repayment schedule will not be met. It is necessary to take actions including modification of repayment terms & conditions and additional equity investments by shareholders. However, difficulties arise from both the lenders – which include many global financial institutions, representing both private-sector and government-affiliated financial institutions – and from shareholders, who are not straightforward to deal with. As we will inevitably face difficulties in the negotiations, we would like to appoint a reliable FA with sufficient global experience to support us.
<Details of our support>
- Verification and analysis of business plans and cash flow forecasts
- Consideration of financing and capital-raising options
- Preparation of explanatory materials for stakeholders
- Support for coordination and negotiations among stakeholders
- Advice on term sheets (in collaboration with a law firm) etc.