Instructed initially by the board to prepare a report on the options available to rationalise an eight company group in the light of sector downturn in autumn 2010 I became an advisor to the board throughout a process which lasted 7 months. This wide ranging role included management accounting, financial reporting, forecasting and modelling, presenting to the board on numerous occasions and leading the group’s submission and presentation to its bankers.
My initial instruction was to prepare a report to the board on the options available to them to rationalise the group in the light of a major sector downturn. Turnover had fallen by over 50% in a period of 2 years and the group was in danger of becoming technically insolvent and unable to trade.
The group comprised a holding company and seven wholly owned subsidiaries working broadly in the construction and building sector. The subsidiary companies were a mix of special purpose vehicles and specific service providers and had a mix of own and shared group management.
The plan formulated was to agree a rationalisation of the group, consolidating operations, reducing overheads and generating a more streamlined efficient group structure. The plan went through several iterations before it was agreed by all stakeholders. This process included discussions with the bank, HMRC and creditors to achieve the consensus and support necessary for the plan to have a reasonable prospect of success.
During the period of my instruction I worked with the FD to support the functions of management accounting, financial reporting, forecasting and modelling. We developed a detailed forecasting package, including a sophisticated modelling facility to account for the impact of decisions in one company across the group and I worked with the FD to update and refine this forecast on a regular basis.
I was required to present to and participate in meetings of the board on numerous occasions, leading the group’s submission and presentation to its bankers and to support the FD in negotiations with HMRC to secure and then implement a time to pay arrangement.
I also acted as a source of independent advice on the solvency of the group as part of the regular monthly board review and assisted with the preparation and implementation of a creditor management plan.
I was retained as an advisor to the board throughout a process which lasted 7 months.
Subsequent to my involvement the restructuring was completed by a combination of insolvency procedures in which I had no involvement. The resulting operations are now trading solvently.