Areas of operation:
A private equity owned US Company was informed by the directors of its German subsidiary that they had been advised to file for German insolvency to protect their personal interests. The European operations, Germany and its Portuguese subsidiary, were forecast by local management to lose money whilst the local bank had given six months’ notice of closure of the agreed credit lines. BM&T reviewed the operations, the forecasts and merger or sale alternatives and appraised alternative courses of action. BM&T also assisted local management to improve receivable collections and working capital management, reappraise the business plan and forecasts on a more realistic basis, and generate sufficient cash flow to avoid the need for bank credit. The business was turned around and a bankruptcy filing, or distressed sale averted.
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Notes, insights and reflections from Matthew, one of our directors and turnaround experts, as he works with companies during Lockdown.