Our primary business philosophy is to assist financially distressed businesses to again become successful financially sound operations.
Ideally we want to achieve the above without the business being placed in BR. However, if BR can provide additional time in a stable and controlled environment to implement remedial action, the distressed business should be placed in BR.
The two alternative objectives commonly pursued within the ambit of BR are:
Where there is a reasonable prospect that the company can be saved, develop and implement an approved Business Rescue Plan;
The disposal of the company’s operations or assets and settle creditors.
The "reasonable prospect" to rescue a financially distressed business should be assessed by experienced independent professionals, who also have established business and/or financial skills, in collaboration with the company's management.
Should it become obvious that the financially distressed company cannot be returned to a viable and prosperous business, only then should the alternative of asset disposals to settle creditors be pursued.
Our experience has shown that businesses are created and expanded by entrepreneurs. We have also found that entrepreneurs lose focus mainly in three situations:
The core product of the business becomes obsolete and the entrepreneur is unable to adapt to the changed environment;
The business outgrows the entrepreneurial environment and develops a corporate character to which the entrepreneur is unable to adapt;
OR
The business is under severe financial pressure and the entrepreneurs’ efforts are focused on cash flow pressures rather than the core business leading to a negative mindset.
Financial stresses further contribute to entrepreneurs losing their vision for the business. In addition they frequently are out of touch with their business, the changing economy, changes in markets and technology whilst encountering ever-increasing expenses.
Redirect. Refocus. Refinance.
Our approach is aimed at redirecting the focus of the entrepreneur/management back towards the core business.
We act in collaboration with entrepreneurs and managers to build on the inherent strengths of the business whilst eliminating accumulated weaknesses. It is critical that when our mandate is fulfilled the entrepreneur and manager are in a position to successfully continue with the business under their own direction.
Refinancing distressed companies is more problematical as the entrepreneurs have usually deployed all their funds in the company and external funders are reticent to provide further capital to the company. We assist with the identification and structuring of refinance facilities.
