Financial advisory in restructuring proceedings
Depending on the stage of their life cycle, the economic climate or other shifts in their environment, companies face barriers and challenges that limit their optimum growth. In some cases, the situation deteriorates from year to year and businesses record declining profitability and liquidity ratios.
Negative symptoms in a company’s operation require comprehensive and prompt action concerning the company’s operation, business model, cash flows, and the structure of assets and liabilities. Effectiveness requires an immediate and comprehensive response, which will preserve the stability of the organisation’s operations.
CMT’s close cooperation with experts in restructuring law allows us to offer support to owners and management boards in developing adequate and effective solutions to improve the performance and standing of the company, both in the short run and over several years.
Restructuring proceedings carried out with regard to entities that are insolvent or at risk of insolvency are aimed primarily at the application of numerous corrective measures, including strategic, operational and financial ones, which prevent a given company from going bankrupt. Furthermore, an efficient and effective restructuring process enables further value creation by improving a company’s economic efficiency.
Our support related to business restructuring may include the following:
Analysis of the financial standing of a company at risk of insolvency
A set of circumstances adversely affecting the financial standing of an enterprise, caused by both external and internal factors, may result in the enterprise becoming insolvent or at risk of insolvency. These circumstances may cause, among others, a decrease in the level of operating income, decreased profitability or increased demand for working capital, e.g. due to an extended period of collecting receivables.
By applying relevant tools and models of analysing the company’s financial situation, we enable prediction and assessment of the occurrence of signs of insolvency. Early detection of signs of deterioration in the company’s financial condition enables the introduction of appropriate corrective measures protecting the company from insolvency and thus from bankruptcy or the need for thorough restructuring.
Consultation and development of development strategies for companies under restructuring
One of the key elements of a successful restructuring process is the development of an appropriate growth strategy from the start, assuming the introduction of corrective measures that will improve the company’s financial standing and optimise its operations.
As experienced advisors, we work in tandem with the company to create a long-term strategy for further development, taking into account the causes of the company’s deteriorating economic position, the selection of appropriate restructuring measures and the introduction of adequate tools to enable further development of the company after the completion of the restructuring process.
Creation of restructuring plans and preliminary restructuring plans
The purpose of the restructuring plan is to give creditors reasonable grounds for assessing the company’s ability to implement a composition agreement. It should therefore be drawn up in such a way as to enable the reader to form an opinion about the realistic prospects for the company under restructuring. It is therefore important that the restructuring plan is prepared in a carefully considered and consistent manner, taking into account all issues relevant to the restructuring proceedings.
We draft comprehensive restructuring plans in close consultation with the company and the supervisor or manager in the proceedings.
We also support companies at the stage of filing for the opening of restructuring proceedings by jointly drafting preliminary restructuring plans.
Ongoing support and financial advice to administrators and supervisors in restructuring proceedings
As financial advisory specialists, we support administrators and court supervisors, working closely with them at every stage of the restructuring process. Depending on the specific needs, our activities in this respect may include assistance in developing composition proposals, support in the preparation of periodic accounting statements or ongoing monitoring of the extent to which the restructuring measures are implemented.
We offer our support in the preparation of reliable financial forecasts based on a professional business model. This is particularly important at the stage of filing an application for the commencement of restructuring proceedings, in which the company must demonstrate that throughout the restructuring process it will be able to meet the costs of the proceedings and liabilities arising after the proceedings are opened, as well as those at the stage of preparing a restructuring plan, when the debtor is required to present projected financial results for the next five years, taking into account the introduction of the planned restructuring measures.
Controlling and management during the restructuring process
We assist companies in the development and implementation of appropriate controlling and management tools and procedures, enabling ongoing control of key aspects of their business from a financial, operational and strategic perspective.
Preparation of opinions on the economic effects of restructuring measures
During restructuring proceedings a company is often required to submit to the court a justification for the restructuring measures conducted, including e.g. sale of significant assets or termination of agreements with contractors. We offer our support in this respect by preparing an analysis of economic effects of the restructuring measures taken by the debtor or manager.
Implementing the private creditor and private investor tests
We offer support to companies that have liabilities to public entities as well as those that receive state aid by conducting private creditor and private investor tests.
Verification and analysis of the feasibility of the composition proposals
We support both companies undergoing restructuring proceedings and creditors by assisting in the verification of composition proposals and assessing the possibility of their implementation on the strength of the restructuring plan and its financial performance forecasts.
Determination of the exit fee
Should an exit fee be required, we offer our support in the preparation of an exit fee valuation, using methods and techniques consistent with OECD guidelines.