Nov 10 2011 TMA Conference some key factors in turnaround;
\n\u2022\tUnderstand the diversity of the stakeholders \u2013 for example HMRC have no interest in negotiating down late payments, they may like to try to ascertaining viability of businesses butif they get any view a business is holding back information causes them to call their debt in.
\n\u2022\tThe HMRC as a \u00a350bn creditor to UK plc – are training staff in debt management.
\n\u2022\tA CVA must demonstrate better value return eg. c25% to creditors vs. insolvency. HMRC pulled down the Oddbins CVA as they were rejected the proposal with 30p\/\u00a3 and failed within the 16 days to give notice of objection, wasting all of the other creditors time.
\n\u2022\tBanks often see the sense to commercially take the hit in a CVA but HMRC will often insist and get all their money.
\n\u2022\tBarclays model of assessment viability; strength of business vs. strength of management
\n\u2022\tUsing a proven team existing management is rarely the right solution. Assessing teams, interviewing often does not work. Only was to test is to work with them. People who say go in with size 9\u2019s ridiculous; issue is how to create long term value get the hearts and minds of employees.
\n\u2022\tSelflessness what\u2019s in it for me \u2013 Turnarounds require pretty selfless individuals.
\n\u2022\tPragmatism and proper capitalisation \u2013 you can\u2019t do it on a shoestring \u2013 things never go to plan. Daily calls on cash flow are a waste of resources.
\n\u2022\tKeep the deal simple \u2013 agenda must be completely aligned
\n\u2022\tAllow sensible time to repay debts
\n\u2022\tHave more than 1 plan; optional exit routes early, e.g. TG Hughes failed after 4m offloaded to GA the retail workout specialist
\n\u2022\tUnusual events push businesses into crisis; Royal Wedding, Jap Earthquake, Bank Crisis. 100m break even IBP was bought just before the copper price went from \u00a33-8k per tonne
\n\u2022\tCommunication \u2013 confidence in boss external \u2013 communicate that internally, to rest of management unions, creditors can become extremely nervous and behave erratically
\n\u2022\tBanks are major competitors for VCs, until then decide they want out.
\n\u2022\tNeed to be on the front foot on PR
\n\u2022\tThink about box and be able to implement new products, launch new channels to market
\n\u2022\tPlan exit before you buy, who will it be sold to, there are many good businesses that can be saved but without an end buyer will be rejected by a VC
\n\u2022\tResourcing keys; credibility and relationships in industry, banks want to know they are selling to a turnaround team not asset stripper, the ability to act much quicker, excellent judgement, manage stakeholders, good intuition and judgement \u2013 gut feel, being brave thick skinned
\n\u2022\tWhy is the market stalled \u2013 management teams are better, banks sorting issues in house, cash skills better, turnaround community better structured
\n\u2022\tHSBC and Lloyds are now the largest VCs in the world, taking \u00a3350 and \u00a3110bn in equity in their portfolio in return for debt, and will be looking to exit
\n\u2022\tWaitrose Sainsbury, Costa growing, but in the main with \u00a31.9tr of consumer debt retail is as bad again as 2009, 5x retail CEOs confirm as bad as it has ever been. If they could offload 35% of their stores they would do.
\n\u2022\tRetailers are working with landlords to fix issues and costs of onerous leases. Out of town supermarket developments are under scrutiny by the government. CVAs are a wakeup call and prepack a complete loss for the landlord, aligning rents to suit the market. This is putting landlord under extreme liquidity pressures; leases have reduces from 25 years standard in 1990 \u2013 7 years currently
\n\u2022\tLegislation is becoming more onerous making restructuring more difficult; prepacks being challenged, retention of titles in favour of holder, CVAs, prepack 3 day delay,
\n\u2022\tTransparency in the insolvency \u2013 e.g. prepack process SIP 16, even considering a sum of money put aside to leave the door open for an IP to investigate the appropriateness by creditors at a later stage<\/p>\n","protected":false},"excerpt":{"rendered":"
Nov 10 2011 TMA Conference some key factors in turnaround; […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,1],"tags":[],"class_list":["post-612","post","type-post","status-publish","format-standard","hentry","category-turnaround","category-uncategorized"],"yoast_head":"\n