- Restructuring & Turnaround
- Financial Consulting
- Forensic and Risk Consulting
- Technology Consulting
- Litigation Support Services
Restructuring & Turnaround
Successful Rescue and Sale of Championship Football Club
This Championship football team had been in financial difficulty for some time, due to its failure to regain top-flight status coupled with overheads of a Premiership team. Under review of its bankers, the club desperately needed to reduce its costs and increase cash flow. Our team of restructuring specialists was approached to advise the directors on a plan to save the club.
Our team developed an entrepreneurial strategy which recognised and utilised the value of the loyal fan base. If this strategy was to be successful it would require the resignation of board members, which was a major challenge but a necessity. Board members stepped down and a plan was devised to increase gate numbers via an appeal to fans to support the club, and to look at other commercial initiatives to raise income while a buyer for the club was sought.
With the outstanding success of the fan base’s contribution, the major secured creditors’ agreement to a consensual restructuring of their debt and existing suppliers dissuaded from taking enforcement action, the club was ready for sale. The club and related assets were successfully sold.
* This was an award-winning case for our team
Restructuring of High-end Travel Company
A specialist travel company with a turnover of circa £120m and approximately 350 members of staff had built a reputation serving high net worth individuals, but had incurred losses. Our team received a referral from a high street clearing bank, initially instructing following an inconclusive review of the company by another professional practice.
Our mandate was to assess short-term cash flow, identify immediate savings, engage with industry bodies to retain licensing and outline risk issues for the bank, all of which was achieved by our restructuring specialists. The next step was to get a non-executive board director to oversee strategy and move the company forward. It was agreed that a dual strategy of financial turnaround and sale be adopted in the short term.
By the end of this process, the overdraft had turned into a cash positive position and our initial marketing suggested significant equity value in the business. The bank received a large fee for supporting the business while we were running the solvent sale process. The result was a successful sale which was significantly above all debt levels, providing significant equity value for all shareholders and retaining jobs for the loyal employees who had stayed with the company through this troubled time.
Complex Group Demerger Realises £37m
The demerger of a privately owned group of 30 companies engaged in a variety of activities, such as textile trading, property development and property finance, presented a complex case for our team of restructuring specialists.
We determined that a ‘newco’ should be set up for the purpose of an s110 reorganisation, which meant parts of the group could be transferred to alternative companies to allow shareholders to separate their business interests without triggering a tax event. This newco was duly established and placed into a Members’ Voluntary Liquidation.
The demerger of interests had a value of over £37m, although this was primarily a reorganisation of interests rather than a cash distribution.
Restructuring to Preserve Value and Stability
A service sector client with a turnover of £140m, up to £16m of invoice finance debt and approximately 150 employees, approached us at crisis point after losing two significant customers amounting to £50m of annual turnover.
Key issues facing the business included loss of sales, suspension of trade credit insurance, and overhead costs which were out of alignment with downsized income projection. In addition, trade suppliers were demanding upfront payments and the business was receiving negative media coverage, which threatened relationships with remaining customers.
Our initial focus was on short-term stability; this was achieved by identifying and minimising the cash requirement, which was met by negotiating extended credit terms with key suppliers and securing the ongoing support of the incumbent bank. Having stabilised the business, we quickly identified that it was viable. We were, therefore, able to develop a credible restructuring plan which would lead to a profitable and cash generative business. This allowed us to obtain increased working capital funding through a refinance of the senior debt facilities and to raise mezzanine finance from a private equity house, thereby providing a long-term funding solution. Our involvement preserved value in the business and employment, delivered a stable financial structure and enabled management to regain control.
Successful Strategies to Protect and Optimise Value
We were requested by a Middle Eastern-based public company to review a portfolio of approximately 120 separate manufacturing companies across many different jurisdictions in EMEA and the Far East.
We identified several issues facing the group, including group management structure and strategy, difficult and indistinct bank relationships, and property and taxation issues. A CRO from our panel was introduced and an Entity Priority Model was prepared by us estimating outcomes for the shareholders in six different scenarios. Proposed courses of action for equalisation of intercompany accounts and large potential recoverable tax losses were devised, as well as evaluating the impact of the onerous property leases in terms of ongoing, holding and dilapidation costs.
With the CRO, we held strategic workshops with executives, which facilitated the preparation of new, more relevant forecasts, following which, enterprise valuations were prepared for all of the trading companies on various bases to validate the value impact of the strategies.
We were able to recommend strategies to exit the non-core businesses whilst protecting and optimising value in the client’s investments in these and the core businesses.
Independent Business Review of Co-operative in Portugal
This co-operative was engaged in the development and construction of housing for its members. The bank had withheld new funding for the development of a new project due to financial difficulties that the co-operative were experiencing. On advice from the bank, we were engaged by the co-operative as advisors. The engagement included consulting with a number of parties, reviewing several cash flow projections and determining feasibility of the project, which allowed the bank to provide the funding necessary to complete the development. Without our involvement, the bank would not have agreed to a new finance package for the co-operative.
Assessment of Trading and Property Risk Cases Across Spain
We worked closely with the bank’s team in Spain to assess trading and property risk cases with debt spanning from €1m to €25m. From 30 cases reviewed, ten Independent Business Reviews were engaged, with eight focusing on property connections. Special Purpose Vehicles and other family/partnership structures were encountered along with numerous cross-entity guarantees.
Due to the complexity of Spanish security rules, both restructuring and recovery strategies were highlighted. We worked closely with UK lawyers based in Spain and have seen numerous successes resulting in debt repayment and writing back of impairment.
Pre-lend Review of Golf and Country Club
We undertook a pre-lend review to assess the viability and benefits of completing course development. New money was lent in structure to support short-term cash flows and not to the detriment of debt service. We assisted the company with HMRC liaison and negotiated time for the Company to benefit from potential contingent upside. Contingency planning was also provided to mitigate the risk of creditor taking control.
Accelerated Merger & Acquisition to Successful Sale
Acted as advisors to a bank on this group company assignment for a period of seven months. The role included regularly advising the bank on cash flow position and strategy outcomes as the group looked to sell assets and raise cash from third party investors to improve the distressed financial position. Ultimately the group was not able to raise the cash required, which resulted in an Accelerated Mergers & Acquisition (AMA) process run by our team. From the AMA, we helped to negotiate a sale to a private equity firm, which allowed the bank to exit the facility at a much reduced write-off than initially forecast.
Advisory Assignment for Large Care Group
We were appointed by a bank to provide the following services: Independent Business Review, cost savings review, monthly Management Information monitoring and subsequently set out an asset sales strategy to de-gear the group. More recently, our team worked with the borrower to assess contingency planning options for the whole group.
Bank Only Advice on Care Group with Syndicated Debt of £200m
The group were experiencing cash issues due to poor occupancy across its portfolio. The asset relating to the bank was mature and generating cash. However, this cash was being absorbed elsewhere in the group to the detriment of the bank. We provided bank only advice regarding the loss sharing agreement and contingency planning for this top five care group. Initially this deal was a series of bilateral lends with a loss sharing agreement in place.
Financial Consulting Case Studies
Securing a Multi-bank Three-year Banking Facility
A leading energy support services provider approached our Corporate Finance team to assist with arranging its new debt facilities due to their strategic importance and the challenging market environment. We were able to assist their finance team with developing the right information to deliver to investors and use our detailed knowledge of bank processes to negotiate the right covenants and banking structure. The funding provided committed lines for further organic growth, as well as additional facilities to support strategic acquisitions.
The new debt package saw the company’s existing debt provider joined by four additional banking partners. In the current market, our ability to work flexibly and cost-effectively allowed the company, rather than it’s banking partners, to drive the financing package and deliver this efficiently.
Forensic & Risk Consulting Case Studies
Lifestyle and Asset Profile
Instructed by an international bank with exposures of over £40m with a debtor who had absconded from the USA, we traced the debtor, identifying their asset profile and conducted a lifestyle analysis. Using various investigative measures we found the debtor to be living in Spain; covert surveillance and intelligence from our local sources discovered they had set up a successful retail chain, invested heavily in foreign commercial property and had proprietary interests in significant assets in South America.
A UK client wanted us to verify three companies looking to invest in a syndicate. We provided comprehensive reports on the history and make up of all three companies, two of which were based overseas. Our reports included profiles on individual directors and key shareholders and their relationships with other companies.
Research established that one of the proposed overseas companies had a somewhat chequered history, raising concerns as to their ability to comply with the Foreign Corrupt Practices Act (FCPA). This intelligence aided the client in reaching an informed decision that this company was not suitable for the syndicate.
Our forensic accountants have acted in a number of complex cross-jurisdictional cases relating to, among others, advance fee frauds, share ramping, stock market underwriter fraud, fraudulent trading and breaches of company law. This work invariably involved the preparation and presentation of complex forensic evidence at trial and exercising Section 2 powers in the obtaining of documentation and interviewing individuals without the right of silence, leading to successful prosecutions and convictions.
An offshore company had been set up as a special purpose vehicle for a specific contract involving $21m, with the funds channelled through Jersey, Cyprus and Russia. We investigated concerns as to the existence of shadow directors who really controlled the companies. We also reconciled money flows to service contracts to address possible money laundering and misuse of funds; this involved taking control of two offshore companies in different jurisdictions, and visiting the outsourced accounting function in Eastern Europe to obtain the companies’ financial records for analysis.
Technology Consulting Case Studies
Forensic Investigation into Intellectual Property Theft
Our computer forensic experts were engaged to conduct a forensic investigation into possible intellectual property theft by a client’s former employee and to conduct an internal investigation into the activities of several current employees. Copies of internal system data and PCs were made and analysed.
Despite a concerted effort by one individual to conceal his activities, we found evidence that unauthorised copies of confidential data had been uploaded and viewed on his PC. Our experts also found evidence of a conspiracy with current employees, which allowed the client to take prescriptive action against them.
Investigating Alleged Director Fraud
Our computer forensic experts were engaged to conduct an investigation into possible intellectual property theft by a client’s former employee and to commence an internal investigation into the activities of several current employees. Copies of internal system data and PCs were made and analysed.
Despite a concerted effort by one individual to conceal his activities, we found evidence that unauthorised copies of confidential data had been uploaded and viewed on his PC; we also found evidence of a conspiracy with current employees which allowed the client to take prescriptive action against them.
Litigation Support Services
Forensic Accounting Evidence in Football Club Court Case
Our experts were appointed by the solicitors acting for the insurers of a law firm in a claim faced by the insurers of £175m. Our experts reconstructed the cash flows of the football club on a daily basis over two years, restating these as if the takeover by the former owner had not taken place. This proved to be a highly complex undertaking.
We concluded that the club would have gone into a form of insolvency process in any event and, therefore, that any loss was small. The matter was settled after Mediation.