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When a company is facing a turnaround, its management members will often find themselves in an environment filled with chaos and confusion. However, as each major business segment is examined and brought back to health, the company can regain its stability. Like a complex jigsaw puzzle, the pieces fit together again, restoring meaning, order, and profit.
In serving numerous financially distressed companies, we initiate the turnaround efforts by actively listening and understanding the situation as perceived by top management. We have found that corporate problems are often more complex than initially thought. The key is to accurately define the company's challenges and options, and to structure solutions that maximize the talents available. These solutions typically involve both "quick fixes" that provide immediate benefits and savings and "operating solutions" that create long-term stabilization and value creation. The result is a unique, operationally oriented plan for success, driven by a fully committed management team. Through our model, which has been fine-tuned continuously, the company will return to health and have the opportunity to attract favorable financing for its new business model, take advantage of strategic opportunities, and return substantial value to all parties involved. Very simply, we are here to work interactively with management to help transition a crisis ridden company into a healthy and stable one.
Additionally, our wholly owned subsidiary, AGI International Sourcing & Marketing, offers a broad spectrum of professional services in export development, international marketing, global sourcing or outsourcing, and offshore manufacturing. For details, please go to: www.agiicorp.com/ism/
The turnaround key steps include:
Review of the Problem
The review phase provides the basic information needed to develop a plan to ensure your company's viability. The analysis includes:
* Existing financial statements, Current cash flow
* Accounts receivable and inventory status
* Management and organization, Creditor problems
* Existing legal, accounting, and regulatory problems
* Marketing and operational strategy
* Relationships with financial institutions, Reporting systems
* Public disclosures, if required
Maximization of Internal Cash Flow
One of our first tasks is to create additional time for the company and management by maximizing the current cash flow, through:
* Design of an "Alarm Reporting System"
* Proper management of accounts payable, Sale of inventories
* Reduction of the accounts receivable collection cycle
* Sale of fixed assets, Consolidation and shutdown of facilities
* Identification of areas for breakthrough cost reductions
* Product or service price changes
Design of Alarm Reporting
System
Managing your company through a difficult period will require timely, meaningful reports. In a crisis situation, each day has enormous importance. The reports usually include, but are not limited to:
* Daily cash control, 8 to 13 week rolling cash flow
* Daily control over purchases, inventories and operations
* Sales and billing control, Credit and collections
* Special reports on key indicators and issues
Development of Corporate
Strategy/Financial Plan
Comprehensive short-range and long-range strategic plans are developed to demonstrate to financial institutions, creditors, customers, internal management, shareholders, and/or regulatory agencies that you have the capacity to survive the crisis and develop a viable company. The plans often include:
* Marketing strategy related to product lines and mix
* Specific programs to adjust selling, administrative, and operational expenses to
expected financial performance
* Recommendations for managing existing liabilities and assets
* Critical path scheduling of initiatives and projects
* Organization charts and the assignment of responsibility and authority
* Pro forma balance sheet, profit and loss, and cash flow projections for a minimum of three years
* Forecasting assumptions which are defensible
* Key statistical data and supporting narrative information
Creation of a Creditor Plan
Based on an analysis of your company's financial condition, it may be appropriate to develop, along with qualified legal counsel, a creditor plan that includes:
* Extended payments, Waiver and/or deferral of interest and related charges
* Conversion of debt from short-term to long-term, or to equity
* Cancellation of debt and/or lease reductions, Exchange of debt for assets
* Special handling of priority claims, lawsuits, and insured claims
Identification
of New Funding Sources
If it is determined that new funding is needed, we will identify sources, prepare appropriate presentation material, and negotiate complete transactions. We have built an extensive worldwide network of financing available to our clients. Typical situations are:
* A new financing plan with existing financial institutions
* Development of relationships with new debt or equity financial sources
* Bridge financing, Off balance sheet financing
* Vendor and customer financing
We also evaluate proposals from alternative financing sources, assist with negotiations, and coordinate the closing of transactions.
We have been there and know what needs to be done. A crisis situation is no time for learning.
Our wholly owned subsidiary, AGI International Sourcing & Marketing, offers a broad spectrum of professional services in export development, international marketing, global sourcing or outsourcing, and offshore manufacturing. For more details, please go to: http://www.agiicorp.com/ism/
To inquire more about our Turnaround Management service, email us at: companies@agiicorp.com
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