A listed company encountered cash flow problems and internal management issues. This resulted in two Directors resigning and an automatic suspension on the ASX. Australian Debt Solvers were engaged by the remaining Director to assist with the cash flow problem, replace the previous Directors and get the company re-listed on the ASX.
We investigated the company’s balance sheet and cash flow and quickly identified the company was simply suffering from a short term liquidity problem. With some small fine tuning on the balance sheet, we were able to turnaround the business immediately.
The company leased large Grade A office space in the city, however they only utilised around 30% of this space. We immediately identified this and advised the company to sub-lease the unused space in order to help with cash flow. Australian Debt Solvers assisted in negotiations with the landlord to achieve suitable terms.
The company had some large trade creditors who had a lot to lose if the company ceased to trade. We were able to negotiate a payment arrangement with these trade creditors, which aided the company’s cash flow.
The company also had some non-performing assets within its business. Upon identifying these assets, we devised a strategy to sell down these assets over 12 months and free up some much needed cash.
In addition to the above, we also created an internal 12 month management and cash flow forecasting model. The model was specific to the business and in line with the above restructuring strategies.
We finally provided our report and 12 month strategy to the bank, who were very close in appointing a receiver to the business. Upon receiving our report, the bank held off in making an appointment, and engaged our consultants to monitor the strategy and report back to the bank every month on its progress. Upon this happening, the company was able to appoint two Directors to the business who were comfortable with the company’s financial position subsequent to our restructuring services. The company re-listed on the ASX, and is now is trading within its banking covenants profitably.