Restructuring

Company restructuring includes the required remedial and/or development actions connected with relevant use of the company’s resources and market opportunities. It is an effective method of making changes in selected areas of the company’s activity for better financial results, improved performance and continued efficient functioning and growth. Restructuring is a complex process that rarely covers only one aspect of a company’s operations. The process is also highly individual as it is closely adapted to the needs of a specific organisation and to a particular market environment.

PLCF offers restructuring consultancy services addressed both to clients facing financial difficulties (remedial restructuring) and to those with a good financial standing who wish to improve performance and thus increase the value of their company (developmental restructuring – within financial strategy consulting).

Remedial restructuring applies to businesses that are undergoing a crisis and are seeking solutions to restore financial stability and capacity for growth.

Companies may face a financial crisis because of internal problems related to the poor condition of the business, which may in turn result from:

• ineffective strategic management (absence of a defined development strategy that allows the company to effectively respond to the changing market environment and to preserve competitive advantage);
• poor business decisions, such as regarding investment projects or acquisitions of other companies;
• poor management of the product range, or an inappropriate approach to the marketing strategy;
• no control over operational costs;
• ineffective management of working capital and financial liquidity;
• excessive debt;
• no financial controls and poor management information flow;
• absence of adequate corporate governance.

The problems faced by a company may also have their roots in external circumstances, such as a changing company environment, leading to increased manufacturing costs, a drop in the demand for the company’s products, poor market development perspectives, growing competition, adverse changes in the labour market or legal and tax changes. All this may lead to a crisis, manifested primarily in loss of financial liquidity. To resolve the situation, a remedial plan must be developed and launched.

PLCF has long experience in the management of effective company restructuring programmes. As a part of our services in this respect, we:

• analyse the company and its market environment, including the company’s resources, operational costs and profitability by product range, analyse working capital management, assess the efficiency of business processes, analyse the financing structure and evaluate the opportunities and threats existing in the market environment;
• identify the sources of the company’s problems and define the restructuring strategy;
• prepare a comprehensive, credible and practical remedial plan that includes a restructuring strategy, proposed actions and a schedule for their implementation;
• prepare a financial model with realistic performance forecasts and an analysis of sensitivity to key parameters;
• support debt restructuring and help find new sources of funding;
• support for remedial plan implementation monitoring and regular assessments of the plan’s effectiveness (also within corporate governance).

Adopting and implementing a restructuring plan is a difficult and challenging process for any enterprise. During such projects, we assist our clients through our expertise and experience to develop an effective remedial plan and to support the company in its implementation. In the process, we build good relations with company owners and management, based on mutual trust.