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. The management team had reconciled itself to inevitable insolvency and was uncertain of its next steps.
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. This enabled the management team to avoid imminent insolvency and provided vital time to fully assess the options available to the business.
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.
Our team of liquidators were appointed to one of the largest offshore marketing and advertising agencies. The agency, based in Guernsey, had a turnover in excess of £50m at its peak and 29 staff. The loss of significant media contracts brought about a decision by the parent company to put the business into voluntary liquidation.
Following our appointment, the Channel Island offices were closed, resulting in staff redundancies.
We were approached in respect of the 99 year old iconic Twickenham Film Studios. The Studios had an intrinsic value of circa £6 million, with creditors of only £1 million, they had run out of cash and the shareholders, who were overseas, did not wish to invest any further monies. An outline deal had been agreed with property developers, whereby the site could be sold for between £6 million and £9 million, depending on planning permission.
In order to overcome the problem, it was agreed to put the Company into Administration as it was insolvent on a Balance Sheet basis, and trade it until such time as the property company could exchange contracts (three months time). Due to local protest and the attitude of the Council, it transpired that we could not sell it to property developers but had to market it as Studios. The marketing exercise got some 40 enquiries and ultimately, a preferred bidder was found and contracts exchanged. In the meantime, a Company Voluntary Arrangement (“CVA”) was put in place and it was agreed with the purchaser that we could use the deposit to pay off the creditors.