The recent economic slowdown, rapid changes in market conditions, currency fluctuations, increase in competition and implementation of directionless strategy can put a company in serious financial and operational difficulties. Liquidity issues and cashflow shortfalls may arise from these situations. Through financial restructuring services, Consulta employs an approach that helps management regain control and trust of lenders and investors.
Understanding the Current Financial Situation
In difficult financial situations, the first step for a company is conduct an assessment of available and trapped cash within a short amount of time. Responding quickly is essential to ride out the crisis. Consulta will create a robust 13 week cash-flow forecast to monitor debt covenants, debt service coverage ratio, cash conversion cycle and debt capacity. In align with the company’s updated business plans, budgets and forecasts, Consulta will identify potential worst-case scenarios as well as perform sensitivity analysis to determine the impact of various assumptions on cash position. Once there is transparency surrounding the short-term cash situation and forecast and stakeholder position, consensus on the next steps will be reached. Consulta will also play an active role in the preparation of cash-generating measures.
Designing & Implementation
Consulta will design a viable roadmap for the client to ride out this situation and provide the client best chance of maintaning day-to-day operations with a restructured balance sheet. Working together with the client, Consulta will formulate more than one route to assess each option and help the senior management team implement the optimum solution suitable for the financing objectives of the client. Having chosen a feasible financing structure, Consulta will assist with negotiation of the loan documentation and develop flexible financing sources through diversification across a wide range debt instruments (ex. leasing, working capital loans etc.).