Restructuring

First of all, we must determine whether the survival of a company really is at risk. To achieve this, we focus on the company's cash-flow situation. 

In some cases, a single measure aimed at restructuring the finances, achieved through successful moderation with the financing group, is sufficient to ensure that the company remains capable of functioning. However, should there already be liquidity issues, the first step is to stabilize the company by introducing effective short-term liquidity-improvement measures. Such measures are focused on generating additional liquidity and restoring a healthy capital base. These can be supplemented by measures aimed at achieving a reduction in costs and an increase in turnover in the short term.

Cost reduction measures may include improving efficiency in existing structures or the introduction of structural changes.

Whilst efforts are being made to stabilize the company, we also initiate the restructuring concept design process. The first stage is to achieve transparency as to the cause of the crisis, the current results, cost base and competitive position by way of a rough concept designed to allow us to quantify the restructuring requirements. These findings then serve as a basis for determining whether the company can be rehabilitated. This basic concept further serves as a foundation upon which a decision pertaining to short or mid-term funding requirements on the part of the stakeholders can be made. In certain circumstances, the nature of the project may require that the sales process for assets not essential to operations and/or other non-strategic company interests also be launched whilst the concept is still being drawn up (distressed M&A). The next step is to design a detailed restructuring concept, together with a comprehensive package of measures. This includes approaches for surviving the crisis and restoring the success potential and competitiveness of the company concerned.

Implementation is kicked off even whilst the concept is still being drawn up. Stringent and thorough implementation management is a major prerequisite for the success of any restructuring plan and as such plays an integral role in the design of a coherent rehabilitation concept. Consistent, timely and methodical action, combined with powerful project organization capabilities, ensure implementation is a success in the long term.

In addition, it is essential at this stage to set up strong controlling mechanisms for monitoring the restructuring measures and their respective implementation, and to firmly establish these within the organization. At the same time, the stakeholders are provided with full updates on a timely basis by way of a focused reporting system.