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Business restructuring

How to prevent the crisis from affecting your company?

Detecting your financial risks early on and involving experts in mitigating them is key to preserving your financial stability.

Our business restructuring team has considerable expertise in helping companies recover from a crisis in a fast and efficient manner. Our experts will promptly identify potential issues at each stage of the crisis, create unique solutions, and conduct their implementation working together with your management. For these reasons, PwC is one of the world’s largest providers of business restructuring services.

Our goal is to offer specific solutions that will have a real impact on our clients’ business, rather than writing theoretical overviews. This is why we create unique value for our clients that is unparalleled on the market. Our business restructuring team draws on the vast professional expertise accumulated across PwC’s global network and tailors it to our clients’ needs at national and international level.

 

Modelling and analysing future cash flows / scenarios

The global implications of COVID-19 are forcing organisations into significant operational, financial and liquidity difficulties. So our clients’ primary question is how they can manage their limited cash resources to overcome those difficulties. Our business restructuring services can help you better understand the present situation and conduct the required analysis of future scenarios:

  • Identifying critical information needs and devising processes for data collection, preparation and analysis;
  • Modelling the impact of scenarios on your company and comparing your commercial revenues with economic recession scenarios;
  • Preparing a dynamic three-month short-term cash flow forecast in various scenarios, defining measures aimed at minimising the adverse consequences and increasing your overall liquidity.
 

Optimising your working capital

During a liquidity crisis, we can help your management in identifying, managing and implementing fast benefits to help you free up the required working capital. We have considerable expertise in optimising and managing working capital in a variety of industries.

Key activities:

  • Benchmarking working capital parameters and identifying improvement opportunities
  • Diagnostics aimed at identifying fast benefits and long-term opportunities for improving your working capital
  • Releasing funds from individual elements of your working capital – accelerating the cash conversion cycle
  • Devising long-term measures to improve your liquidity

Human capital management plan

PwC can help you draw up a comprehensive and flexible action plan addressing human capital issues in the following areas:

  • Critical activities by identifying workers that carry out a particular activity and workers that have the required skills to continue supporting it;
  • Workforce skills your organisation currently needs, as well as processes and systems needed to efficient respond to market changes (including any changes needed by those systems/processes);
  • Processes to respond to any legal/regulatory changes, including efficient management to implement a fast response tailored to your organisation;
  • Proactive forecasts for areas where disruption will have the most adverse effect on your organisation and preparing proposed responses.

Financial restructuring

Companies facing financial difficulties often need to understand possible scenarios in order to successfully negotiate with their main secured creditors. Companies may need to draw up restructuring plans and to receive advice on the best capital structure. We can help in the following areas:

Refinancing

  • Devising a financial model to help monitor your cash flows and accounts payable to creditors, as well as analysing scenarios and stress tests;
  • Assessing your capital structure, including credit agreement tests and security tests, assistance in negotiating for better financing terms and support in drafting agreements.

Restructuring

  • Preparing and implementing your restructuring strategy and helping you draw up a business plan and future forecasts in the light of proposed restructuring opportunities.

Raising funds

  • Support in raising funds, project management and communication with potential creditors, and selecting finance providers by using offers, and assistance in measuring the optimum debt level according to terms and conditions that fit your chosen capital structure.

Information and communications technology (ICT)

PwC can provide the following ICT services:

  • Changes to your workflow aimed at facilitating efficient remote working – work process descriptions, an overview of the technology used and support in buying new technology, change implementation guidelines for workers, IT security requirements and audits;
  • New e-services aimed at minimising direct contact with customers – process analysis (the present situation) and necessary changes, preparing technical specifications for e-services, purchase requirements and implementation quality control (author’s supervision);
  • Critical systems analysis and recommendations – information systems performance analysis, changes to the information systems requirements, an overview of the technology used, and support in buying new technology;
  • Supplier contracts analysis and recommendations – information systems suppliers analysis and necessary changes to supplier contracts.
 

An independent assessment of business

In times of uncertainty, companies, public institutions and banks often need an independent assessment of their present position and future development plans. We can help:

Companies:

  • Assessing your present financial position and short-term liquidity needs under the present economic conditions;
  • Identifying and quantifying areas and the need for external financial support (from the government or financial institutions);
  • Providing an independent opinion on financial information you have prepared for seeking financial aid;
  • Providing support throughout the process of filing your application for financial state aid.

The public sector:

  • Conducting an independent assessment of the financial and business information provided by emergency financial aid seekers;
  • Providing an objective picture of financial aid seekers and their short-term liquidity needs.

Financial institutions:

  • Independently assessing your customers in financial difficulties;
  • Providing an objective and comprehensive picture of their financial position.
 

Project management units and staffing

  • PwC can provide highly skilled workers to satisfy your short-term needs for carrying out particular tasks;
  • We can also tailor our role to satisfy your organisation’s particular needs arising from the crisis;
  • We wish to provide specialist support in areas that are critical to continuing the successful operation of your organisation, which can include project management for all activities related to addressing problems caused by the present situation.

Minimising your costs

We help companies draw up and implement a restructuring plan in terms of strategy, operations and finance. We are systematically working to help our clients stabilise the situation in the short term, thus creating preconditions for implementing medium-term and long-term measures.

Key activities:

Identifying and implementing operational measures - Improving profitability and liquidity

  • Profitability analysis by product categories, services, places etc.
  • Sustainable cost reduction
  • Optimising your operations
  • Implementing a system of key performance indicators

Identifying and implementing strategic measures - Increasing your company value

  • Improving your business strategy (expanding your sales channels, product lines, market coverage etc.)
  • Improving your business functions
  • Streamlining your product portfolio
  • Disposing of any non-performing assets
  • Resetting internal processes (centralising the selling and buying function etc.)
 

Mergers and acquisitions (M&A)

If you find that your company is not performing at the optimum level, we can help you recover the optimum value. We will be working with you to identify issues, assess available options, and help you implement your chosen approach (e.g. selling, improving and selling, or liquidating). We tend to avoid a fire-sale scenario. Improving and selling is the preferred exit where we combine our expertise in improvement and liquidation to maximise the deal value.

Key activities for optimised M&A:

  • Freeing up capital to reinvest in business;
  • Helping deploy resources in your company more productively;
  • Preserving brand reputation and avoiding unwanted publicity;
  • Applying our tested methodology to avoid delays and obstacles characteristic of disposal or liquidation, thus minimising costs and maximising the recovered value.

PwC supports owners facing an urgent need for cash or authorised persons in insolvency cases who are responsible for immediately selling the entire business or certain assets of the debtor.

Key activities:

  • Assessing problematic selling options;
  • Valuing your business or assets;
  • Identifying and approaching potential investors;
  • Preparing the deal documentation, including information summaries;
  • Assistance with due diligence reviews and providing information to potential buyers;
  • Assistance with integration and separation after completion of the deal.
 

Preventive debt restructuring, legal protection (LPP / ELPP) and insolvency

By taking correct early action, companies facing financial distress or insolvency can fully restore their solvency.

Often companies run into financial difficulties or are aware of the threat that they may find themselves in. There are also situations when a company is already threatened with insolvency, but it can be avoided by applying the right solutions in a timely manner. 

By involving our team of experts consisting of lawyers, financial, business management, or tax consultants, we can help you find the best solution. We have experience in solving solvency problems for both small and medium-sized enterprises (SMEs) and large companies.

Learn more

Raimonds Dauksts

Director, Head of Advisory, PwC Latvia

+371 6709 4400

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