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This manufacturing company has regained the confidence of all its stakeholders

You can be a winner when times are difficult

The crisis is not over yet, but you can still be a winner, even now. Our success stories show how effective our integrated approach is: many companies are now in much better shape. You too can benefit from our knowledge and experience. Together we will soon get you back in shape, by tackling your cash management and financing structure for instance.

The situation
An international manufacturing company finds itself with acute liquidity problems due to a drop in demand of over 40%. If action is not taken soon, the company risks bankruptcy. The auditor is having difficulty expressing an opinion on the financial statements. The management lacks an overview and understanding. The bank wants certainty soon about a number of matters, including repayment options, and it wants the Trust Office to acquire the company’s shares. The shareholders fear losing control to the company bank and the creditors, such as the Tax Office, are knocking at the door.

The approach
Immediate intervention is necessary. Despite a deep cost-cutting programme and company-wide reorganisation, persistent falling sales and clients’ worsening payment performance has resulted in liquidity problems. Deloitte immediately engaged all stakeholders in dialogue. There was an urgent need for understanding of the short and medium-term liquidity requirements. Deloitte and the management produced a cash flow forecast showing the shortfall in the next three months. This was communicated clearly to all parties, so that they now have an understanding of the current financial position and short-term prognosis.

The result
Agreement was reached on temporary refinancing to keep the business running in the short term. Based on the analyses and the temporary refinancing proposal, the Tax Office has granted a deferral and shareholders and banks have come up with the balance temporarily. This has given the company extra time to get its financial, operational and legal matters back in order. Deloitte is now assisting with financial restructuring, negotiations with the company bank, disposal of business units and attraction of new equity. The first steps have been taken. This company will soon be ready to succeed again.

You can be a winner when times are difficult. Contact Oscar Snijders or Stefan de Kruijf.

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