Business Recovery Services

We can help the company overcome its working capital challenges by:

• completing a working capital benchmarking exercise to compare performance against peers and identify potential improvement opportunities
• performing a diagnostic review to identify ‘quick wins’ and longer-term working capital improvement opportunities
• developing detailed action plans for implementation to generate cash and make sustainable improvements assisting with the implementation of sustainable working capital reduction using robust, efficient and collaborative processes, with a focus on the key levers of:
  • process optimisation throughout the entire end-to-end working capital cycles;
  • compliance and monitoring;
  • identification and improvement of commercial terms;
  • creating and embedding a ‘cash culture’ within an organisation, where the trade-offs between cash, cost and service are evaluated and optimised.

Assuming that the company knows the causes of its decline in performance or the crisis, it can react by preparing and subsequently adopting the necessary measures. If the situation allows for an out-of-court solution in the form of financial restructuring, we assist companies in designing and implementing a restructuring plan.

We help the company reach alternative refinancing options for dealing with its existing debt, and we also design and implement restructuring of the balance sheet, optimise the capital structure, and obtain new financing options (e.g. in the form of off-balance sheet financing).

Key actions:

• Refinancing - capital structure assessment, covenant testing, security review, change from bilateral to structured financing, negotiating better terms of financing, standstill negotiation, restructuring
• Preparation and implementation of a restructuring strategy - assistance in preparing a business plan and future outlook taking into account the proposed restructuring options, proposing adjustments of hedging instruments that correspond to the chosen restructuring strategy
• Fund raising - support in securing financing, project management and communication with potential creditors, selection of a financing provider through tenders, assistance in identifying an optimal debt capacity, assistance in modifying the capital structure, support in setting the covenants, stakeholder management
• Stakeholder analysis, tactics and managing relationships - providing comprehensive management of tenders, communication with applicants for funding, coordination of key stakeholders, monitoring cash flow and net income development

In today’s challenging business environment, several factors carry potential risks even for successful companies, such as the worldwide economic instability, the growing competition, the changing legal requirements and continuous technological progress. In this context, a strategical restructuring plan often comes into play.

Key actions:

• Downsizing - companies sell, shut down or spin off unprofitable, money-losing divisions and subsidiaries or those that no longer fit its strategy
• Downscoping - restructuring or selling off units that are less related to the main business, but without layoffs or work force reductions
• Divestiture strategy - a portfolio restructuring strategy, which allows a corporation to refocus on its core activities and raise much needed capital
• Repositioning – exploration of new markets/ new clients/ new products

We can provide fiscal and legal assistance to companies wanting to restructure their government debts, in accordance with Government Ordinance 6/2019.

Key actions:

• Creating the debt restructuring plan and the prudent private investor test
• Provide counsel and assistance during the restructuring process in relation to national fiscal authorities
• Monitoring the implementation of the debt restructuring plan 

The ad-hoc mandate represents the confidential procedure, initiated at the request of the debtor, through which an ad-hoc agent, appointed by the court, negotiates with the creditors in order to reach an agreement between one or more of them and the debtor, in order to overcome the difficulty of the debtor.

In order to appoint the ad-hoc agent, the debtor addresses the president of the tribunal in whose constituency he has his headquarters, proposing in this sense an insolvency practitioner, authorized according to the law.

The object of the ad-hoc mandate will be to reach, within 90 days from his appointment, an agreement between the debtor and one or more of his creditors, in order to overcome the state of difficulty, safeguard the enterprise, keep jobs and coverage of receivables on the debtor.

To this end, the ad hoc agent may propose:

• debt write off
• rescheduling or partial debt reductions
• continuation or termination of ongoing contracts
• staff reductions
• any other measures he deems necessary

The preventive agreement represents the contract concluded between the debtor, on the one hand, and the creditors who hold at least two thirds of the value of accepted and uncontested receivables, on the other hand, by which the debtor proposes a recovery plan of his enterprise and to cover the creditors’ receivables against him, and creditors agree to support the debtor's efforts to overcome the difficult state of the debtor.

The request to open the preventive procedure is addressed by the debtor to the court in whose jurisdiction it has its headquarters. The provisional conciliator, appointed by the syndic judge from among the insolvency practitioners, taking into account the debtor's proposal in this respect, elaborates, together with the debtor, the list of creditors and the offer of preventive composition, which is notified to the creditors.

The recovery plan must include at least the following measures:

• reorganization of the debtor's activity;
• the ways in which the debtor understands to overcome the state of financial difficulty;
• the expected percentage of satisfaction of receivables, which cannot be less than 50%;
• the deadline for satisfying the receivables established by the preventive agreement, which may not exceed 18 months from the date of concluding the preventive agreement.

The approval of the concordat depends on the fulfilment of the following cumulative conditions: the debtor's company is in a state of financial difficulty; the value of the disputed and/ or in litigation receivables does not exceed 20% of the credit mass; the preventive arrangement was approved by the creditors which represents at least 80% of the total value of the receivables.

Complex and volatile economic environment, rapid changes on the market or new competition and technologies - all of these factors can cause financial distress. If left unaddressed they can ultimately threaten the very existence of the company. Taking into account all possible options available for a financial distress solution, a controlled insolvency process can be the most appropriate under certain circumstances. At other times, insolvency may be an unplanned and unexpected event. In both cases the priority is to protect the value of the company and maximise satisfaction, which requires extensive expertise and experience with insolvency proceedings.

Key actions:

• Insolvency process - managing liquidity, support in securing credit and off-balance sheet financing, preparing a restructuring strategy, preparation and administration of property inventory, ordering, valuation of assets, preparation of a reorganisation plan, support in selling assets, preparation and implementation of the sale process of a distressed company of non-core assets, review of potentially contestable legal acts, preparation of materials for the creditors’ committee or the creditors’ assembly meeting, coordination of stakeholders (management, shareholders, creditors, other advisors), interim management, legal in-court representation, collecting claims, implementation of the reorganisation plan, supervising the operations for the administration of the company's patrimony, support in partners negotiations throughout the entire insolvency process
• Post-insolvency process - support post-deal handover, support during distribution of proceeds according to schedule, support with post-deal integration
• Bankruptcy process management

PwC supports owners and companies, most commonly under a Sell-side mandate, either facing an urgent need for cash in order to avoid insolvency or looking to address the disposal of certain underperforming business units and their related assets in a timely efficient manner, while trying to maximize their recovery value. This type of service can also be provided to insolvency trustees, appointed by creditors with selling a debtor’s business lines or assets (i.e. non-core assets, in most cases) via a distress sale process.

Key actions:

• Assessment of distressed sale options
• Assistance in preparing a data room
• Valuation of the business or assets
• Identifying and addressing potential investors
• Preparation of teasers and information memoranda
• Preparation of transactional documentation
• Assistance with due-diligence and provision of information to potential buyers
• Coordination of stakeholders during the sale process
• Assistance with post-deal integration (if the case – only in Buy-side mandates)

Where businesses are underperforming, in distress, or in crisis, we provide tailored business review services either for financial stakeholders or for the business itself. We offer output in the form of objective analysis that evaluates the fundamental viability of the company and serves as a platform for finding solutions among stakeholders (lenders, management, shareholders, etc.).

Key actions:

• Reviewing the historical and forecasted performance of the business
• Reviewing the current financial position and short-term liquidity forecast
• Helping the company identify and quantify reasons for its underperformance
• Providing lenders with a transparent view of the company’s situation
• Setting out potential options available to stakeholders
• Determining prerequisites for the long-term viability of the business under prevailing market conditions 

Our services in the area of non & sub-performing exposure management are primarily focused on the evaluation of loan portfolios and the implementation of the optimum disposal solution of such portfolios or individual loans, as advisors for banks and other financial institutions, both on sell and buy-side mandates. Our services include conducting financial due diligence, data optimization, preparing information memoranda & marketing materials, asset valuations and disposal options analysis. Using our unrivalled  investors database, we identify potential investors, and facilitate sales negotiations and deal completion. For portfolio investors, we offer comprehensive advice on the buying process and detailed due-diligence of the portfolio.

Key actions:

• NPL portfolio assessment - portfolio evaluation, stratification and segmentation, portfolio due-diligence and validation of assumptions, development of an optimal portfolio sale strategy
• Market assessment - assess the interest of strategic and financial investors (market testing), recommend further steps in the NPL portfolio value optimisation
• Debt sale - implementation of the portfolio sale strategy, preparation of marketing materials (e.g. teaser, information memorandum, process letters, detailed presentation of the portfolio), preparation of transactional documentation, management of relationships with investors and support in negotiations, Q&A process management, investor selection and transaction closure
• Purchase of receivables - purchase strategy of the portfolio, portfolio due-diligence for potential investors, support with transaction negotiations
• Prevention of bad debts - analysis and improvement of the collection process, setting up relevant KPIs, design and implementation of collection strategies

If you become aware that your subsidiary business, autonomous business unit facility, branch or brand is underperforming, we are able to help you recover optimal value. We work with you to identify the issues and evaluate the options available and assist in implementing the chosen approach (e.g. sell, fix and sell, or wind-down). We can also help you identify and manage inherent risks of the process. The planned outcome will be an increase in shareholder value by selling, restructuring, closing, or winding down the underperforming business or subsidiary.

We aim to avoid the ’fire-sale’ scenario. “Fix and sell” is a preferred exit route where we combine our turnaround and disposal expertise to maximise the value of the transaction. We may even consider expanding the business by merger or acquisition if this can add to the eventual resale value.

Controlled exit - we would gradually shut down operations over an agreed timeframe, while finishing existing orders, selling assets and maximising the collection of receivables. Sometimes, however, the best strategy may be to terminate the company’s activities as soon as possible.

Key actions:

• Release capital to reinvest in the business
• Help to re-deploy resources more productively elsewhere in the business
• Maintain brand reputation and avoid adverse publicity
• Avoid delays and obstacles typical of a divestment or disposal, thus reducing the costs and maximising recovery 

Many of our senior team are experienced ex-bankers, meaning that we know how lenders think, thus allowing us to ‘frame’ the debt financing request as per lenders approach and credit policies, while trying to maximize the chances of obtaining the needed financing.

A company’s funding should be properly structured and appropriately tailored to match its growth strategy, assets allocation and levels of already existing debt, thereby reducing the risk of further difficulties arising along its path to development and ensuring that scope/ destination of targeted financing it is met.

A company’s strategy for development frequently calls for obtaining outside funding, either new financing or refinancing of existent debt, which can significantly affect the company’s condition. Key elements of the financing strategy include the magnitude, cost, and security of the financing to be obtained.

The most frequent types of Debt Advisory requests are as follows:

• Business financing (e.g. working capital lines, short term payable loans, trade receivables financing, factoring and other types of credit facilities, incl. refinancing)
• Investment financing (e.g. acquisition and/or construction of PPE, development and/or acquisition of RE projects/ assets, leasing facilities, including refinancing, etc.)
• Acquisition financing (e.g. project finance for business acquisition deals such as buying a targeted company existing/ new shares or taking-over distress/ bad debt) 

Some companies, despite being profitable, decide to cease operations due to objective reasons, which are not necessary related to economic or commercial reasons. In such cases, the decision to start a controlled liquidation procedure belongs to the shareholders, who can appoint a liquidator to manage the process. Our experience tells us that a smooth solvent liquidation and recovery not only requires a thorough understanding of laws and regulations, but also benefits from experience with local best practice and the ability to carry out complex on-the-ground work.

We can help shareholders design actionable close-down plans, define corresponding solutions, deploy a team to assist the client in execution, and successfully implement the liquidation procedure, to lower the risk of losses and maximize the recovery.

Our services include:

• Conducting inventory operations, asset valuation, auctions or seeking potential buyers, attending negotiations and assisting transaction of assets
• Review company information and documents and assess its financial position, in order to comment on issues which need to be completed or settled before liquidation.
• Handling company accounting and financial issues
• Analyze the potential compensation payable and timing for early termination of contracts.
• Ensuring payments to creditors and commencing litigation against delinquent debtors, to maximize the recovery
• Distributing of assets and liquidities to shareholders
• Ensuring procedure runs according to national legislation (relationship management with state authorities and filling relevant paperwork) and providing advice on communication with regulators, creditors, shareholders/partners and debtors, to maximize asset protection