Turnaround Management – An Overview

Goal of Turnaround Management

The purpose of turnaround management is to:

• Determine if the business is still viable or what is required to restore viability
• Develop and implement a turnaround management plan
• Rebuild bank support
• Restore shareholder value

What’s Involved in Turnaround Management

• A review of operations and financial performance (ie. P&L, BS, Cash Flow, finance systems and controls etc.)
• Development of revenue enhancement &/or cost reduction plans
• Cash flow and working capital management (debtors, creditors, stock)
• Critical assessment of management team, business plan and forecasts
• Assessment of appropriate debt structure and bank security issues
• Assistance and advice on the sale of a business or division etc.
• Assessment of other corporate finance alternatives such as buying a competitor etc.
• Development, implementation and monitoring of the turnaround strategy
• Project managing the turnaround strategy

Possible Outcomes of a Turnaround Management Process

The following is a summary of the typical outcomes of a turnaround management process:

• Streamlined, viable business
• Bank agrees to support the restructuring plan
• Sale of the business or of non core assets
• Merger or acquisition of a competitor
• Debt facilities are refinanced with another bank
• Adequate controls are put in place to manage the business
• Restored shareholder value

In summary, if steps are taken early to address the causes of underperformance then appropriate measures can be put in place to develop and implement a successful turnaround management strategy.

If you would like to discuss this topic further please feel free to contact us.

Michael Fingland

Managing Director



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