Executive Summary

  • Business restructure requires a financially and operationally driven approach that focuses on balance sheets paired with shared effort in all aspects of the business to establish a plan. 
  • The best way to protect the value and restructure a company may mean the implementation of the plan informally without the need for an insolvency appointment.
  • AS Advisory recently was involved in the restructuring of a prominent vegetable producer, which given its market position and ownership arrangement made sense to conduct the restructure outside of the formal insolvency regime.

The Company

The company was a high-profile vegetable producer with annual revenue of approximately $25M. The company has been using cutting-edge technology to be a notable hydroponics grower utilising solar and green energy technologies. 

The company had been supported by large private investors that wished to see the business continue as a going concern while extracting their investment. 

The Challenges

Due to a shareholder dispute coupled with challenging market conditions and a fledgling product the company faced impending liquidity issues and the real prospect of insolvency in the near term. 

The Solution

To conduct a strategic review of the operations and its financial position to develop a plan to enable the company to resolve its issues and move forward while at the same time protecting the investors’ value.

 We determined that restructuring and sale of the business was the best outcome. Further, to protect the goodwill of the business and its investors a decision was made to inform one of our team members to assume the role of Chief Restructuring Officer (CRO). 

The position of the company in the marketplace was identified through a business and operational assessment: limited access to capital and deteriorating shareholder relations. It was determined to position the company for a rapid sale. A detailed information memorandum and a management presentation were drafted, delivered and circulated to potential acquirers.

The CRO also assisted management with internal decision-making and the handling of external communication during this difficult time for the company. In particular, the development of cashflows and budgets, monitoring of financial and operational performance and stakeholder management created stability in relationships with creditors and other stakeholders whilst dealing with the aspects of distress in the company.

 

Within 12 months the business was sold for an excellent return, allowing it to continue trading today, resulting in the protection of the investors’ capital and the continuation of the company and employment for its staff.

Our approach drew on the extensive years of experience of the team and ensured a quick response to real-time issues. The implementation of a team member working alongside the company’s existing management enabled the stabilisation of the business, along with the development of feasible strategies that improved the prospects for the company and led to a return to or increased profitability and liquidity while at the same time developing and then executing a comprehensive turnaround management plan.

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