In the hostile and unfamiliar terrain confronting a distressed company, we provide assistance in various situations including underperformance compared with forecasts, cash difficulties, business reorganisation, debt renegotiation, launch of amicable or legal collective proceedings, distressed M&A and many more.
We work with all stakeholders involved in a distressed situation, be they company management, shareholders, creditors, receivers, potential buyers or others. We combine our economic, financial, valuation, strategic, and accounting expertise to provide essential, bespoke, incisive support to take rapid and often far-reaching decisions with major implications for the business.
Our proven expertise in crisis environments, our knowledge of key players and our technical analyses on ensure that optimal solutions are implemented in distressed situations.
Types of services we can offer
Accuracy takes action when a company is facing difficulties. We can be called in to review historical financials and identify the cause(s) of difficulties or to provide an understanding of the economic environment and the business model in order to identify key strengths and assets for the business. We are also able to assess the current cash situation of a business as well as its potential short-term requirements to ensure the legal framework is best suited to the situation. Where an organisation needs to streamline its cost structure, we can assist in identifying relevant recovery measures such as restructuring, downsizing or partial disposals and analyse their cost and feasibility. We are able to prepare mid-term business plans, identifying financial requirements and potential for growth and sustainability, as well as provide assistance in negotiations with shareholders, creditors or new partners.
In the context of the debt renegotiation of a company under LBO (following a decrease in profitability and breach of covenants), Accuracy can be appointed to perform an Independent Business Review. In these instances, we can: review the company’s historical performance and assess the current cash situation; challenge the business plan prepared by Management based on historical figures and the economic environment; understand the business model and provide an analysis of sensitivity to key internal or external factors; determine short-term cash requirements and future cash-flow generation to propose alternative debt repayment schedules; and provide assistance during discussions with stakeholders (shareholders, banks, legal advisors, receiver, …).
In a distressed environment, cash forecasts are crucial in the decision-making process, and at Accuracy we have developed significant expertise in modelling them. Based on management information and an analysis of historical data, we will prepare a tailor-made monthly (or weekly) cash-in and cash-out forecast over the business plan period, making it possible for the company to simulate various scenarios. We will also provide a forecast of the balance sheet and its development, rationalise the development of the working capital requirement and integrate additional modules such as financing and restructuring options.
Accuracy can assist a company throughout a collective legal process (safeguard or insolvency). In these contexts, we can provide assistance in opening the best-suited proceedings (preparation of the financial documentation for the court), in dealing with accounting issues after the launch of the proceedings, in preparing monthly P&L and cash-flow reporting for the receiver, in establishing the restructuring plan (cash-flow forecasts and supporting documentation) and analysis of debt repayment scenarios (10-year repayment plan and shorter alternatives) and finally during discussions with private and public creditors and in the presentation of the restructuring plan to the court.
In the event that the decision is made to dispose of a distressed company or business either partially or totally as part of an out-of-court or court-imposed settlement, Accuracy can be appointed to organise and schedule the disposal process. In this event, we can carry out detailed analyses of the strengths and weaknesses of the company or business and prepare different divesting scenarios as well as identify potential business partners. In addition, we can prepare selling information (teaser, information memorandum, management presentation, etc.), manage the process (contacts with potential acquirers, data room and Q&A sessions) and participate in both discussions on a day-to-day basis and negotiations with potential acquirers.
Accuracy can assist acquirers of distressed businesses by conducting financial due diligence and advising on the most attractive acquisition scenarios, including:
- Analysis of the past performance and actual financial situation of the target
- Preparation of a business plan, including the impact of restructuring measures and potential synergies with our client’s activities
- Analysis of take-over scenarios (e.g. shares or asset deal, acquisition perimeter) depending on the circumstances (whether out-of-court or court-imposed disposal)
- Assessment of acquisition risks and opportunities and associated financial requirements to ensure the viability of the project
- Assistance during discussions with the target and other parties (receiver, court, creditors, etc.).