business restructuring by brian bergin, pwc
TRANSCRIPT
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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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January 2010Slide 3PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
Financial
Slide 12
Changing the funding structure
Changing terms and conditions
Applies to all businesses today..
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PricewaterhouseCoopers
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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PricewaterhouseCoopers
Trust
Financial
Slide 14January 2010
Company
Lender
UpfrontCommunication
No SurprisesApproach
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January 2010PricewaterhouseCoopers
Financial - examples
Slide 15
Routine renewal of facilities
Amendment request
Distressed
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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
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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January 2010PricewaterhouseCoopers
Example 3 Distressed
Slide 18
Already in breach
Understand the banks options
Importance of relationships
Open to alternatives solutions..
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January 2010Slide 19PricewaterhouseCoopers
Refinance
Continued focus on operational restructuring to improve cash flow
Financial Alternative Solutions
Limited in
current marketMore difficult fordistressed
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January 2010Slide 20PricewaterhouseCoopers
Refinance
Raise new equity
Interest being shownfrom abroad
Looking for cheapdeals
Corporate finance
advisor
Continued focus on operational restructuring to improve cash flow
Financial Alternative Solutions
Limited in
current marketMore difficult fordistressed
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January 2010Slide 21PricewaterhouseCoopers
Raise new equity
Debt for equity
Interest being shownfrom abroad
Looking for cheapdeals
Corporate finance
advisor
Continued focus on operational restructuring to improve cash flow
Confined to largerdeals to date
Creative solution
Certain banks
willingAdvisor
Financial Alternative Solutions
Limited in
current marketMore difficult fordistressed
Refinance
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January 2010Slide 22PricewaterhouseCoopers
Refinance
Raise new equity
Debt for equity
Interest being shownfrom abroad
Looking for cheapdeals
Corporate finance
advisor
Continued focus on operational restructuring to improve cash flow
Confined to largerdeals to date
Creative solution
Certain banks
willingAdvisor
Financial Alternative Solutions
M&A
Limited in
current marketMore difficult fordistressed
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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January 2010Slide 24PricewaterhouseCoopers
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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PricewaterhouseCoopers
Q&A
pwc.com/ie/businessrestructuring
Th k
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2010 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers refers to the networkof member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independentlegal entity *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US) PwC
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