CRO and Financial Restructuring

Over 140 restructuring situations with over £158bn of debt across the UK, the US and Continental Europe

Solving the problems faced by boards and companies in financial distress

THM pioneered the Chief Restructuring Officer role in the UK and has successfully restructured over 140 businesses with over £158bn of debt.

If you think your business may need our help and would like to discuss this confidentially, please contact us:

We understand the key pressures and challenges you face

  • Creditor pressure

    As a business manages its cash flow to avoid drawing on facilities or a “cash crisis” and/or there is an impending debt maturity, creditor pressure mounts.

    Clear prioritisation and communication with key creditors is essential to avoid compounding the issues being faced by the business. This creates additional burden on management and staff.

  • Managing confidence in the business

    Negative press and/or market sentiment compounds the problems being faced by a business; maintaining confidence as a business moves through a restructuring process is critical:

    • Clear and accurate communication is essential
    • Regular, robust and detailed reporting is key to ensuring stakeholders support the business and the key decisions
    • Taking a pro-active approach to PR minimises the risk that damaging press articles impact the business

  • Changing stakeholder priorities

    Equity holders may decide to withdraw support for the business and shareholder Directors may step down leaving the remaining Directors exposed. The original debt holders may decide to sell their debt which potentially changes their objectives:

    • Long term vs short term view outlook
    • Debt holders may become “loan to own” holders

    Managing the different and potentially competing agendas of key stakeholders is an important and time consuming task

  • Ineffective project management

    A restructuring process brings multiple stakeholders and their advisers together and it is common to find the debtor company pulled in many different directions.

    To achieve a restructuring in a reasonable timeframe effective “crowd” and project management is key. A CRO will bring first class project management to a restructuring.

  • Board overload / Lack of resource

    The pressures and challenges of a restructuring process combine to place a huge time burden on the board and management team. Allowing management time to run the business is a critical component in the delivery of a successful restructuring process.

  • Staff / Management incentivisation

    In a stressed situation, it is common for the Management Incentive Plans to be “out of the money” and for staff to be concerned about future wage payments. It is essential that key people in the business are sufficiently incentivised to deliver the best outcome for the company and its stakeholders. This is often a sensitive issue best dealt with by an independent party.

  • Directors duties and responsibilities

    In a stressed situation, Directors duties move to the fore:

    • Maximising the returns for stakeholders is the overriding objective
    • It is common for Directors to receive letters from stakeholder groups seeking confirmation that the Directors are acting in the best interests of the “value break” creditors
    • Appropriate and robust governance is essential, as is restructuring experience and high quality legal advice

  • Liquidity concerns

    In a stressed or distressed situation, cash and liquidity can become the key focus. When cash is scarce, the board and management need to prioritise critical payments to provide time to deliver a successful restructuring.

    Robust cash flow forecasting and reporting is essential both from a cash management perspective and a stakeholder confidence perspective.

Appointing THM as the CRO and/or restructuring adviser to deal with the multitude of issues a restructuring brings has many benefits:

Experience

THM has been through a process similiar to yours many times

Independence

Both the perception and the reality

Resource

Management can focus on running the business and creating value

Relationship

THM has worked with a large number of the key players in the restructuring market

Key Stages of a Financial Restructuring Process

THM has significant experience delivering complex financial restructurings and leading the key workstreams required. Whilst every restructuring process is unique, there are certain key stages common to most:

1 Crisis Stabilisation

  • Cash flow forecasting and reporting
  • Working capital management
  • Lender standstills
  • Business continuity
  • Directors’ duties
  • Contingency planning

2 Options Analysis

  • Business and financial review
  • Facilities review
  • Stakeholder assessment
  • Implementation options
  • Stakeholder communications

3 Restructuring Proposal

  • Business planning
  • Valuation and entity priority modelling
  • Debt capacity
  • Restructuring proposal
  • Stakeholder negotiations

4 Implementation

  • Term sheet and lock up
  • Legal and corporate documentation review
  • Tax structuring support
  • Corporate reorganisation
  • Project management
  • Asset disposals

5 Post-Completion

  • 100 day plan
  • Turnaround initiatives
  • Ongoing Board support
  • Transition management

Our Recent CRO and Financial Restructuring Experience

Sale of Business
€820m debt
Group CFO
Netherlands
Financial Restructuring
€365m debt
CRO
Germany
Refinancing
$3.7bn debt
Advisers to the Company
UK/International
Financial Restructuring
$2.2bn debt
Independent Director and CRO
UK