Restructuring
Let’s turn things around together!
Are you facing challenges in your business? Are you struggling to remain competitive in a rapidly changing market? Are you even facing a liquidity bottleneck? Our restructuring and reorganisation experts will support you in your turnaround.
Restructuring and reorganisation projects are usually associated with a corporate crisis. This can take the form of a symptomatic liquidity crisis or a root cause strategic crisis. Dealing with such extraordinary situations is time-critical - but the necessary liquidity is usually lacking. Often the company finds itself caught between efforts to realign and what is still possible within the legal framework (e.g. imminent insolvency, capital loss and over-indebtedness according to Art. 725 CO). This makes it essential to consider business and legal aspects holistically.
Our interdisciplinary team of experts will design tailored solutions to meet your specific needs. From analysing your business model and finances to suggesting operational improvement, we have the expertise and experience to help you succeed.
Let us help you stabilise your business, reduce costs and improve operating performance to successfully position your business operations for future growth.
BDO’s approach to restructuring and reorganisation
A corporate crisis unfolds in four different stages as described briefly below:
Strategic crisis
This is when a company realises that its current strategy is no longer effective and needs to be adjusted. The company may face a loss of market share, greatly increased competition or changing market conditions.
Earnings crisis
If a company fails to overcome the strategic crisis successfully, it may enter an earnings crisis in which its financial performance deteriorates. This can be reflected in declining sales, falling profits, rising debts or difficulties in meeting financial obligations.
Liquidity crisis
A liquidity crisis occurs when a company does not have enough cash to meet its short-term payment obligations such as invoices and wages. This stage is particularly dangerous and can threaten the company’s continued existence.
Composition/bankruptcy
If a company is unable to overcome its liquidity crisis, this can ultimately lead to a debt restructuring moratorium/bankruptcy. This is the final stage of a crisis, in which either a restructuring plan is drawn up as part of a debt restructuring moratorium or the company’s assets are liquidated and operations are discontinued.
If a strategic crisis is not recognised or the response to it is inadequate, this typically triggers an earnings crisis, which can turn into a liquidity crisis or even bankruptcy. While pressure to act increases steadily, the room for manoeuver decreases. Therefore, it is important for companies to identify crises and take measures to manage them as quickly as possible in order to limit the damage and set the course for a successful future at an early stage.
BDO’s services offer valuable support to companies in crisis as follows:
- Financial and business model analysis: We carry out an in-depth analysis of your company and the market environment to help you recognise symptoms and identify the root causes of the crisis.
- Strategic planning: Based on the findings of the business model and financial analysis, we develop concrete options for you. We create a restructuring and reorganisation plan that sets out the necessary measures to stabilise operations, increase profitability and realign your company.
- Support with implementation: We assist you in implementing the developed measures to ensure that they are carried out as planned and on schedule. Depending on what you decide, measures could include developing new business areas, spinning off operating units, entering into new collaborations, optimising operating procedures, streamlining processes, reducing costs, increasing efficiency and safeguarding solvency.
- Reporting: Implementation progress and the impact of implemented measures are monitored and reported periodically to management or the board of directors.
- Financial planning and cashflow management: We support you in the budgeting process, planning your liquid assets, and accessing alternative sources of financing.
- Securing liquidity: In case of acute liquidity bottlenecks, we support you in negotiations with creditors and in refinancing your company.
- Interim management: If required, we can provide experienced interim executives to manage your company during the crisis and help implement the restructuring and reorganisation plan directly within your company.
Contact us to learn more about our restructuring and turnaround services and discuss how we can work together to achieve your goals.