Business Restructuring by Brian Bergin, PwC

8/14/2019 Business Restructuring by Brian Bergin, PwC

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PwC

Brian BerginRestructuring

Dublin Chamber of Commerce 27 January 2010

PwC


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January 2010Slide 2PricewaterhouseCoopers

Types of restructuring

Restructuring

Operational Financial


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Operational

Attack vs. Defence

Preparation in advance of Financial Restructuring

Quick wins

Looking deeper


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January 2010PricewaterhouseCoopers

Operational - examples

Slide 4

ast moving consumer goods

Retailer


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Example 1 FMCG

Slide 5

Completed first stages

Root & branch review from the bottom up

Old well established contract identified

Quantitative & Qualitative business case for change

Dilemma


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Example 1 FMCG Insights

Slide 6

1.Look deep and challenge

2.

3.Dont spare any sacred cows

4.

5.Retain your focus and vision


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PricewaterhouseCoopers

Operational - examples

Slide 7

ast moving consumer goods

Retailer

January 2010


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Example 2 Retailer

Slide 8

1.Rapid expansion

2.

3.Initial restructuring plan

4.

5.Unreliable and incomplete data6.

7.Process evolved into wider plan

8.

9.Bank support

10.11.Transformational change


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Example 2 Retailer Insights

Slide 9

1.Importance of reliable information

2.

3.Evolving process

4.

5.Maintain the support of your lenders / other stakeholders6.

7.Impact of Change on People


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Operational Key Takeaways

Slide 10

1.Need to look forensically at the business and challenge

2.

3.Quality of information

4.

5.People


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PricewaterhouseCoopersJanuary 2010

Slide 11

Types of restructuring

Restructuring

Operational Financial


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Financial

Slide 12

Changing the funding structure

Changing terms and conditions

Applies to all businesses today..


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Financial

Slide 13January 2010

Normal no breach Distressed - in breach

Requirement forrenewal

becoming morestringent

Possible issuesre forecastbreach ofcovenants

Reflects a lot ofbusinesses

Going concern isdependent onongoing banksupport


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Trust

Financial

Slide 14January 2010

Company

Lender

UpfrontCommunication

No SurprisesApproach


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Financial - examples

Slide 15

Routine renewal of facilities

Amendment request

Distressed


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Example 1 Routine Renewal of Facilities

Slide 16

More challenging

Plan well ahead in advance

Detailed business plan

Plan B

Increased due diligence


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Example 2 Amendment Request

Slide 17

Wide range of triggers

Prepare response plan Solution Orientated

Communicate with lenders

Sharing the pain

Understand the lenders position of higher risk

Due Diligence and amendment fees


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Example 3 Distressed

Slide 18

Already in breach

Understand the banks options

Importance of relationships

Open to alternatives solutions..


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Refinance

Continued focus on operational restructuring to improve cash flow

Financial Alternative Solutions

Limited in

current marketMore difficult fordistressed


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Refinance

Raise new equity

Interest being shownfrom abroad

Looking for cheapdeals

Corporate finance

advisor



Limited in



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Raise new equity

Debt for equity



Corporate finance

advisor


Confined to largerdeals to date

Creative solution

Certain banks

willingAdvisor


Limited in


Refinance


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Refinance

Raise new equity

Debt for equity



Corporate finance

advisor


Confined to largerdeals to date

Creative solution

Certain banks

willingAdvisor


M&A

Limited in


Timing

Planning

Advisor


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January 2010Slide 23PricewaterhouseCoopers Slide 23

Financial Key Takeaways

1.Importance of relationships

2.

3.Plan ahead and be prepared for negotiation

4.

7.Contingency planning & Mitigating Factors

8.

9.Understand the banks position


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Conclusion

PricewaterhouseCoopers Slide 24

1.Applies to all businesses2.

3.Thorough review, bold well informed decisions and strong execution

4.

7.Importance of relationships

8.9.Plan well in advance


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Q&A

pwc.com/ie/businessrestructuring

Th k


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Business Restructuring by Brian Bergin, PwC