At an advanced stage of a crisis, the company's key financial indicators are steadily deteriorating and the first liquidity problems emerge. Internal improvement measures introduced remain behind the target. Stabilization of the net assets, financial position and results of operations as well as competitiveness is jeopardized without temporary involvement of external specialists.
A high level of debt or recurring liquidity bottlenecks in the company defines the "distressed" phase. Equity and debt capital providers demand the preparation of a comprehensive restructuring concept for future investment and financing decisions. Extensive cost reduction programs are often indispensable for the turnaround. All measures are subordinate to the restoration of debt sustainability.
When in such a crisis, economic or financial reasons lead to sale decisions or create purchase opportunities, a high degree of prudence, consistency and speed is required in the planning and implementation of such complex transactions. We have the specific knowledge and many years of experience to provide the best possible support in such special circumstances - on both the sell- and the buy-side. We create sustainable added value for our clients through our combined expertise in the areas of transaction advisory and restructuring.
Financial resources and equity-strengthening measures are regularly required to overcome crisis. We actively accompany processes of restructuring financing, refinancing of expiring loans, intra-group as well as external balance sheet restructuring measures.
The following questions are the primary focus in determining current funding needs:
With which strategy can the company differentiate itself sufficiently and secure sustainable earnings?
What structures and investments are required to achieve this?
What restructuring program can be derived from this from a business management perspective?
By using integrated planning tools, we ensure transparency with regard to financing requirements and develop tailor-made coverage concepts for this purpose.
Once the financing objectives are clarified, the business case and the financing requirements derived from it must be documented in a manner appropriate to the target group. In the case of financing during a crisis, an expert opinion on restructuring and solvency (in particular a restructuring opinion or a going concern forecast) usually serves as the basis for the financing decision. Nevertheless, even in non-crisis scenarios, it is advisable to prepare financing discussions by means of comprehensive corporate documentation. We are familiar with the requirements of capital providers from the numerous financing transactions we have accompanied. Moreover, we support our clients in a targeted manner in the preparation of financial factbooks, information memoranda, business plans, expert opinions and other documents.
In addition to purely balance sheet-improving measures, restructuring projects regularly require the injection of additional funds to strengthen liquidity. This can take the form of equity capital provided by existing or new shareholders as equity financing. Alternatively, management should consider debt-oriented measures, such as bridging and restructuring loans. Guarantees and subsidies from the public sector can represent additional financing potential. Other special financing instruments include leasing, factoring and mezzanine capital.
A typical restructuring-related financing concept includes several of the previously mentioned elements. Likewise, there is often a coordinated approach by the financing partners and syndicated financing structures. We take into account the increasing complexity with the number of participants through comprehensive project management.
Financing processes, not only in restructuring circumstances, usually represent projects which, in terms of complexity and resource commitment, go well beyond the day-to-day business of the firm’s management, but at the same time have a very significant impact on the future viability of the entity to be financed. We guide our clients through all phases of the financing process. Thus, we accompany preparation, option selection and financing concept as well as approaching of financing partners and contribute to the relief of management capacities by our implementation-oriented consulting approach.
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