Restructuring advisory is a specialized area within financial advisory services that focuses on assisting businesses facing financial challenges or operational difficulties.
The primary objective is to help struggling companies regain stability, improve their financial performance, and ultimately navigate crises. A restructuring advisory may employ restructuring consultants and analysts possessing expertise in areas such as finance, accounting, operations, and strategic planning.
Depending on the nature of the engagement, the expertise of a restructuring consultant may reflect the diverse expertise and focus areas within the broader field of restructuring and turnaround consulting.
Understanding the role of a restructuring advisory specialist involves recognizing their expertise and responsibilities in guiding companies through financial challenges and operational difficulties. A consultant could help you with:
1. Financial Analysis and Diagnosis
Traditional restructuring consultants analyze a company’s financial health, examining factors such as cash flow, debt levels, profitability, and liquidity. They diagnose the underlying issues contributing to the company’s financial distress or underperformance.
2. Operational Assessment
They assess the company’s operational processes, organizational structure, and efficiency. This involves identifying areas where costs can be reduced, processes streamlined, and resources optimized to improve overall performance. This may also involve reviewing financial statements, cash flow projections, operational processes, market conditions, and other relevant data. The consultant will work closely with the client’s management team to understand the company’s challenges’ root causes and identify improvement areas.
3. Developing Restructuring Strategies
The consultant will develop a comprehensive restructuring plan tailored to the client’s needs and objectives based on the assessment findings. This plan may include recommendations for cost reduction, debt restructuring, asset sales, organizational restructuring, strategic repositioning, or other measures to improve financial performance and operational efficiency.
Learn more about the attributes of a good business turnaround and restructuring advisory consultant:
4. Stakeholder Management and Engagement
Restructuring consultants engage with various stakeholders, including creditors, investors, employees, suppliers, and regulatory authorities. They communicate the restructuring plan, negotiate with creditors, and manage relationships to gain support for the restructuring efforts. Effective communication and stakeholder management are essential to building trust and garnering support for the restructuring efforts.
5. Implementation Support
Consultants provide guidance and support to the company in implementing the restructuring plan. This may involve overseeing organizational changes, facilitating negotiations, assisting with asset sales, and monitoring progress toward achieving restructuring goals.
6. Crisis Management
In cases of financial distress or crisis, restructuring consultants provide crisis management support. They help stabilize the business, manage liquidity issues, and mitigate risks to ensure the company’s survival during challenging times.
7. Monitoring and Adjustment
Consultants continuously monitor the implementation of the restructuring plan and adjust strategies as needed. They track key performance indicators, assess the effectiveness of initiatives, and make recommendations for course corrections to ensure the company stays on track toward financial recovery.
8. Post-Restructuring Support
Even after the restructuring process is complete, consultants may provide ongoing support to help the company sustain its improved financial and operational performance. This may involve advising on long-term strategic planning, performance monitoring, and risk management to ensure the company’s long-term viability.
Summary
While effective navigation of a restructuring consulting engagement requires close collaboration, clear communication, and a proactive approach, they provide numerous opportunities to address a company’s internal and external challenges. Partnering with a restructuring consulting firm offers countless benefits for businesses facing financial challenges or operational difficulties. Restructuring consultants bring expertise in financial analysis, operational assessment, and strategic planning to help companies navigate crises and emerge stronger. By conducting thorough examinations, developing tailored restructuring plans, and providing implementation support, restructuring consultants assist businesses in stabilizing their operations, improving financial performance, and regaining competitiveness. Their guidance in stakeholder management, crisis management, and post-restructuring support ensures a smooth transition and sustainable long-term success. Working with a restructuring consulting firm empowers businesses to overcome obstacles, optimize performance, and thrive in today’s dynamic business environment.
At Harney Partners, we have successfully represented challenged companies in negotiations with various stakeholders — including lenders, investors, creditors, customers and suppliers, trade unions, landlords, and more. Combining clear-eyed communications, a seasoned turnaround strategy, and restructuring consulting services, Harney Partners consistently wins the stakeholder support necessary to achieve long-term success.