Posted on: July 2nd, 2013

Corporate restructuring advice usually involves painful decisions as to layoffs or discontinuing certain lines of business. It usually involves shutting down one part of a company so that capital and resources can be redeployed.

Often a corporate restructuring involves negotiating with lenders or trade creditors so that company can improve its liquidity.

The best way to formulate corporate restructuring advice is to develop a holistic picture of a company’s problems be it product, customer, production, overhead, or balance sheet.

Upon seeing a 360° view, a realistic plan of corporate restructuring advice can be drafted. Most companies have interrelated issues stemming from weak controls or management systems.

Often, through improving a company’s information quotient, greater focus is brought to key issues that are easily solved. For example, if a company has weak cost accounting systems, it probably is not realizing consistent gross margins.

This information lapse is compounded by a sales decision to sell product at a lower than standard gross margin. This lower price could mean the company is not making profit on the sale.

Once price is broken with one customer, other salesmen are likely to quote lower pricing as a way to build sales as well.

This leads to a downward spiral of gross margin compression. While revenue may grow, the company may not be generating enough gross margin to cover the operating expense.

Corporate restructuring advice needs to be fully informed by the prior worst practices of the organization. A flexible plan of corporate restructuring advice containing low cost, technology based solutions and more management communication over key issues is critical.

Changing the underlying processes and rebuilding management focus and information metrics will lead to long lasting change.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.

Corporate Restructuring Advice