Successfully Overcoming a Crisis – the SMART Plan
There is no such thing as a universally applicable roadmap for a financial restructuring process. This is due to the fact that a large number of the issues that must be taken into account differ from company to company. It is important to choose and combine those solutions from a mixed bag of options that will secure liquidity for the restructuring process as well as restore capital and satisfy stakeholders.
Several Options for Raising Capital
There are several measures that can have different effects and that can be taken in order to raise the necessary capital and restore equity.
- Contribution of cash capital
- Silent partnership
- Write-off while the debtor makes an agreement to repay the loans with future profits
- Assets in kind
- Disclose hidden reserves
- Proactive working capital management
- The Laender provide credit guarantees for investment credits as well as working credits
- Liquidity assistance credits provided by the Kreditanstalt für Wiederaufbau (German Development Loan Corporation)
An Integrated Restructuring Plan as a Realistic Means of Achieving Your Goal
The insights that were gained need to be used meaningfully by implementing corresponding measures slowly, with intuition and sound judgment. We at HANSE Consulting are glad to assist you with that and offer you our expertise.
Priorities within individual measures that take interdependencies into account are defined by the implementation roadmap. Monitoring the implementation can help to ensure that the measures are implemented in a timely manner. In doing so, target achievement is constantly checked and any deviations from the original plan are analyzed if necessary.
The expected effects of the implementation roadmap are displayed on segment plans, including all restructuring costs. These are used to develop a planned profit and loss statement, a financial plan and a planned balance. The result: an integrated restructuring plan. It is important to highlight critical assumptions and uncertainties, such as the development of raw materials prices, competition or contracts with third parties. These will be accounted for in various scenarios. Additionally, specific indicators are added to the implementation roadmap, which indicate the progression of the restructuring process and the level of target achievement – this is the so-called SMART plan.