FTI Consulting’s financial restructuring experts provide comprehensive financial advice to companies, their lenders, shareholders and other stakeholders to support a range of financial requirements including balance sheet restructurings, raising additional finance or refinancing.
The financial restructuring process can be complex due to the divergent interests of different stakeholder groups and the legal processes required to implement a transaction. Our team has extensive situational experience of managing these processes and successfully delivering restructurings involving diverse stakeholder groups and multiple jurisdictions.
Our approach to advising stakeholders is based on a robust financial review of the business and an assessment of the options available. Typical assignments include:
- Review of historical and forecast financial performance
- Evaluation of stakeholder positions
- Comprehensive options analysis and appraisal
- Stakeholder management and intermediation
- Management of negotiations from initial discussions to full documentation of agreed transactions
As part of delivering the lead financial advisory role, we draw upon our complementary independent business review, business planning, operational restructuring and cost reduction, crisis management, short-term cash management, tax, and valuation services.
Where appropriate, we can provide interim management, such as Chief Restructuring Officers, to provide executive support to management through the restructuring process. Please see interim management for details of FTI Consulting’s interim management capabilities and credentials.
Our team is appointed by either financial stakeholders, where they have concerns about a business they have an interest in and wish to appoint independent reporting accountants to review the situation, or by a business itself needing to better understand the reasons for underperformance.
An independent business review clarifies the situation for both financial stakeholders and the business and allows a clear evaluation of the available options. Our services are tailored to the specific circumstances of each situation; however, a combination of the following elements will often be required:
- Assessment of the validity of market and strategic assumptions
- Evaluation of the management team and structure
- Review of historical and forecast trading performance
- Assessment of liquidity and related cash flow forecasts to understand and analyse the drivers of cash flow
- Independent view on whether the business has adequate liquidity to continue operating normally, thereby allowing time for financial stakeholders to consider their options
- Assessment of debt capacity
- Evaluation of stakeholder positions
- Options analysis and appraisal
Our team is supported by the use of FTI Consulting specialists, including operational, tax, insolvency and industry professionals, to review specific aspects of business plans.
A robust business plan and supporting financial projections are essential when:
- Stakeholders require a financial and/or operating plan upon which to base a financial restructuring
- An underperforming business needs to transform its operational and/or financial performance
A good business plan will contain a clear articulation of business strategy, a set of actions linked to implementation plans and a detailed set of financial projections. While business plans may meet management’s internal requirements they often, in our experience, require augmentation to be fit for purpose particularly when subject to external diligence.
Our team provides an unbiased and objective view to support the articulation of business plan assumptions. In challenging and developing business plans our team typically:
- Assesses the validity of market and strategic assumptions
- Evaluates the management team and structure
- Reviews key systems, controls and processes
- Provides financial modelling capability to support scenario analysis
FTI Consulting specialists, including operational, tax and industry professionals, support our project teams to review and develop specific aspects of business plans.
A truly successful restructuring solution will often require some form of operational change and performance improvement.
Experts from our operational transformation team stabilise financial and operating performance and are skilled in rapidly delivering tangible and sustainable benefits to improve a company’s underlying operations and create enterprise value. Our expertise is centred on business reorganisations, including site closures, profit enhancement (primarily through cost reduction opportunities) and the delivery of working capital initiatives to improve cash flow.
We provide restructuring services in the following key areas:
- Business reorganisations
- Business rationalisation and cost reduction planning and implementation
- Establishment or enhancement of company finance functions and processes
- Leadership roles including CRO appointments to lead the development, implementation, co-ordination and communication of restructuring plans
Our team works either alongside management to complement and leverage existing management capabilities or as an adviser working on behalf of company lenders or investors. In either case, our focus is on “doing” rather than lengthy report writing. Our team is senior and experienced and has held leading positions in industry.
We are also able to provide interim management services. For more information on FTI Consulting’s interim management services and capabilities please see Interim Management below.
In distressed situations where businesses are experiencing cash pressures and/or other business crises, our team brings credibility and hands-on support and experience to help management teams navigate the various financial, operational and strategic issues they will be facing during this challenging period.
In such situations, it is imperative that management is able to forecast and manage short-term liquidity in order to maintain business continuity, retain the confidence of key stakeholders and allow the business to continue to trade while restructuring solutions are developed and delivered. Our team is able to support management teams through rapidly implementing active cash management procedures in order to take control of cash processes within a business and buy a period of time for stakeholders to assess the options available for the business.
Our team is also able to support management teams with stakeholder intermediation, co-ordination and project management, restructuring negotiations and in dealing with other time critical issues. In addition, we are able to provide chief restructuring officers and other interim management services. Please see Interim Management below for further detail.
For businesses experiencing cash pressure, proactive short-term cash management is often a necessary component in order to buy the time required to prepare, negotiate and execute a restructuring plan. We support management teams by implementing:
- Short-term cash forecasting processes and procedures to improve the visibility of cash requirements
- Active cash management to identify working capital and other cash flow improvements to maximise available liquidity and minimise any additional cash requirement
- Effective short-term cash reporting for internal management and external stakeholders
When working on or behalf of lenders, our team is also able to provide an independent view of cash requirements and cash management options.
The senior restructuring professionals at FTI Consulting are prepared to fill the void when client companies face leadership, financial or operational challenges. In a moment’s notice, these experienced and credentialed senior executives assume board level or management roles, providing the leadership and strategic decision-making ability to maintain momentum, establish corporate priorities, build morale and provide critical continuity. Our executives serve in the following roles: chief executive officer, chief operating officer, chief financial officer, chief restructuring officer, financial controller and treasurer. FTI Consulting also has the capability to provide other additional resources as needed.
FTI Consulting team members have experience at the highest levels of business, often having held senior positions for more than 25 years. We place a high priority on dedicating teams of executives who have served together on multiple engagements and have industry-specific experience to ensure quick understanding of the operational, competitive and regulatory landscape. Interim executives may also utilise specialised FTI Consulting experts in accounting, operations improvement, tax, turnaround or insolvency to resolve specific organisational challenges and support the restructuring process.
Our restructuring specialists develop pragmatic, workable solutions to clients’ tax issues arising from restructurings and reorganisations. Our team is at the centre of any transaction, particularly where divestments are included in a restructuring plan, ensuring a tax-efficient execution of that plan and ongoing tax efficiency of the remaining business.
Our tax restructuring services include:
- Identifying cash opportunities, for example identifying and expediting tax refunds
- Tax efficient structuring of transactions, including debt for equity swaps and pre-pack administrations
- Preserving tax attributes
As part of a fully integrated service, the tax services team works alongside the restructuring specialists to ensure seamless delivery of advice, particularly where refinancing and structural change is involved.
Our restructuring professionals use their expert knowledge of formal insolvency and other enforcement procedures to provide leading contingency planning and insolvency advice.
We provide a commercial solutions-based approach focusing on critical issues. In particular, we support companies and their financial stakeholders through:
- Developing and implementing effective non-consensual financial restructuring plans, either as alternatives to a consensual restructuring deal or to expedite a restructuring
- Using insolvency as a tool to restructure onerous liabilities or achieve a value maximising exit
- Assessing and developing closure options, withdrawal strategies where a subsidiary, division, product or business in its entirety is to be wound down or closed, as well as management of the implementation of these plans
- Achieving recoveries in contentious cross border scenarios through insolvencies to pursue investigations, asset tracing, litigation and recoveries
We have a proven track record of maximising realisations for stakeholders using formal insolvency processes. Our team has considerable experience in formal insolvency appointments including Administrations, Receiverships, Company Voluntary Arrangements, Liquidations and Share Pledge Enforcements. We have a global presence with a network of insolvency and restructuring practitioners in the major financial centres.
We provide a full service offering and our insolvency services are supported by tax, valuation, transaction structuring, forensics, real estate and strategic communications professionals.
The FTI Consulting valuation group provides senior lenders, junior debt providers and corporates with valuation analysis and opinions in a range of restructuring contexts. These include valuation analysis for lenders to support restructuring negotiations, valuations for insolvency practitioners to support pre-packaged administrations and valuation opinions for security agents to support share pledge enforcements or schemes of arrangement, as well as expert witness reports. We have deep experience of the practical issues involved with valuing leveraged, stressed and distressed companies.
In some circumstances, it is not possible or appropriate to conduct a sale process over a “conventional” disposal time frame of many months. We provide solutions for corporates and stakeholders seeking an orderly exit while avoid the damage to the business that might result from a longer, traditional M&A process. Working on behalf of corporates, financial creditors and other stakeholders, our specialist team is able to act quickly to conclude a value maximising transaction in an accelerated time frame.
Our team is supported by restructuring, tax and transaction services experts and has considerable experience delivering successful outcomes using both out-of-court or in-court transaction structures.