Services Business Recovery And Turnaround

Business Recovery And Turnaround

At BRI Ferrier, we understand the many pressures that can push businesses over the edge. If engaged early enough, we also know how to turn the situation around.
Bri Logo

HOW WE CAN HELP

Our business recovery and turnaround management services emphasise business renewal and positive change.

We work with organisations of all sizes – from sole traders and private companies to ASX-listed corporations and government entities – to help them take stock, reassess, plan and rebuild.

We liaise with boards of directors, financiers, accountants, lawyers, regulators, shareholders, financial advisors, private equity firms and hedge funds to help our clients through financial difficulties. Depending on the specific circumstances, we can achieve this through a formal voluntary administration appointment or through informal turnaround management services.

Our aim is to recover a business’s viability and reduce the severity of the financial fallout.

Depending on the specific circumstances, we can achieve this through a formal voluntary administration appointment or through informal turnaround management services.

Business Recovery & Turnaround Image (1)
Voluntary Administration
Business Review & Advisory
Acquisition & Sale Due Diligence
Informal Arrangements

BRI Ferrier is a leading provider of recovery services to insolvent or financially distressed businesses using the voluntary administration process.

Voluntary administration offers breathing space for organisations, so they can reorganise their financial affairs and potentially save their business. When appointed as voluntary administrator, we work closely with boards of directors, financiers, employees, unions, creditors, suppliers and other stakeholders to identify exposures, mitigate risks, strengthen core operations and maximise returns to creditors.

We carry on a company’s business where it is viable, assessing its profitability, developing strategies for future viability, investigating and reporting on all possible recoveries, and recommending the best options to creditors for maximum returns.

Where a company can be restructured, a deed of company arrangement (DOCA) is typically used to formally compromise the debts owed and return the company to a solvent position. A DOCA is a flexible arrangement that can be tailored to suit the needs of the company being restructured, with the aim of continuing the business as a ‘going concern’ and, ideally, to turn around its financial situation.

We can also incorporate a creditors’ trust into a DOCA and accelerate a company’s exit from administration. A creditors’ trust is an independent arrangement where the creditors receive rights as beneficiaries of the trust in place of their claims against the company. This mechanism can be used to immediately return the company to solvency and assist ongoing trading after voluntary administration.

BRI Ferrier has extensive experience in achieving successful recovery outcomes through voluntary administration and DOCA across many industries.

Past Experience:

King of Knives

The King of Knives Group – which sold knives and cookware in around 60 stores (including 14 franchisee operations) across Australia and New Zealand – struggled due to the tough retail climate. The group was burdened with unprofitable stores and cash flow pressure due to excessive rent and payroll costs. Ultimately, the financier withdrew its support, prompting an urgent need to restructure the business’s finances and operations. The group appointed BRI Ferrier as voluntary administrator and we rationalised the business to excise underperforming elements and leave a viable core operation. Through a concurrent DOCA incorporating a creditors’ trust, the business was returned to the directors as a solvent viable operation.

National Buildplan Group
In 2013 National Buildplan Group Pty Ltd (NBG) was a construction business with eight offices across Australia, 179 staff, substantial government-related accreditations and 132 contracts on foot in various stages of completion. The company owed around $10 million to its secured creditors, $3.3 million to employees (potentially more with forced redundancies), and $58 million to ordinary unsecured creditors (including sub-contractors and tax authorities). Its overall deficiency of assets was around $58 million. BRI Ferrier was appointed as voluntary administrator and assessed that, if liquidated, the company would provide no return to unsecured creditors while employees would lose up to 60% of their claims. We resolved, instead, to restructure NBG using a DOCA and creditors’ trust, creating a settlement fund using proceeds recovered from NBG contracts and a contribution of funds from the company’s director. In return NBG was released from its debts, was able to continue to work out contracts and retain valuable accreditation rights. The creditors’ trust resulted in the secured creditors and employees being paid in full and remaining unsecured creditors receiving a dividend significantly greater than could be achieved in a liquidation.
Redmond Drilling

Redmond Drilling, a mining contractor in Kalgoorlie, appointed BRI Ferrier as voluntary administrator. With creditors owed $1.7 million, a DOCA was administered. A successful turnaround strategy then ensured creditors received 100 cents in the dollar and the return of the company to the director to resume profitable trading.

FEA Group
Forest Enterprises Australia Limited (FEA Group) was the third largest of the forestry managed investment schemes to collapse in Australia. The group provided a tax-driven product that enabled retail investors (growers) to acquire woodlots for planting, maintaining and harvesting trees. It became insolvent in April 2010 and BRI Ferrier was appointed as voluntary administrator. The group was subject to approximately $1 billion of stakeholder claims, including grower claims of around $420 million in 17 separate schemes (trusts), and claims by the group’s banking syndicate of around $265 million. After protracted negotiations with the banking syndicate and receivers, BRI Ferrier devised a DOCA, which averted costly litigation by facilitating a sale of encumbered land, with the potential to return over $30 million to growers. The outcome of the FEA Group administration turned conventional practice on its head by successfully recognising growers as significant stakeholders. Previous failed agricultural and forestry managed investment schemes had resulted in no return to growers.
Regional South Australian Airline
A South Australian airline was responsible for delivering the daily newspaper and essential blood supplies to regional hospitals. When it experienced financial challenges, BRI Ferrier was appointed as voluntary administrator. While complying with Civil Aviation Safety Authority (CASA) requirements, we maintained regular deliveries while negotiating a successful sale of the business. Subsequently, all surplus aircraft were sold, and all pilots and staff retained their positions. Creditors received a minimal dividend and crucial state services continued to regional areas.

BRI Ferrier provides businesses with complete independent reviews of their operations to ensure their future viability.

We carry out comprehensive health checks to determine a business’s market position, critical issues and opportunities for continuity and growth. We also provide specific reviews for business owners, financiers and other stakeholders to assist their strategic decision-making.

Our business review and advisory services cover:

  • strategic planning and advisory
  • financial analysis
  • crisis stabilisation and business restructuring
  • cash flow strategies
  • business mergers and acquisitions
  • performance improvement
  • risk management
  • viability reviews
  • refinancing options and strategies
  • assets divestment strategies.

Past Experience:

Wholesaling and transport SME

BRI Ferrier advised a small-to-medium-sized enterprise (SME) in the wholesaling and transport industry in western Queensland and the Northern Territory. We advised on pricing, market forecasts and expectations. We also restructured the company's operations. This had a positive long-term financial impact on the business.

Perth hi-fi store group
BRI Ferrier was engaged informally to restructure a well-known group of Perth hi-fi stores that was experiencing a cash flow crisis. We implemented a turnaround strategy and mentored the director of the business. The group continues to trade as a profitable going concern.
Riga Commercial Bank
BRI Ferrier was engaged as an advisor to the administrator of Riga Commercial Bank, Latvia's fifth largest bank, which was forced to close due to heavy losses on Russian securities. We assisted with successfully restructuring the bank, which was helped by financing from the European Bank for Reconstruction and Development (EBRD) and other international sources. The bank maintained its licence and was renamed First Commercial Bank of Latvia.
Family office – offshore pre-IPO private placement
BRI Ferrier assisted a family office with negotiations and due diligence for an offshore pre-IPO private placement issued by a Peoples Republic of China (PRC) airline. The airline sought to raise approximately US$200 million from the private placement. It also sought to launch an IPO on The Stock Exchange of Hong Kong. The private placement involved purchasing an exchangeable bond from a Hong Kong-based airline, the shares of which were exchanged with the shares of the PRC airline company upon its IPO.

BRI Ferrier provides assurance to individuals and companies that are buying or selling businesses, so they can assess the potential benefits of the deal against the risks.

Our due diligence process analyses and validates all financial, commercial, operational and strategic assumptions about the proposed transaction.

We advise individuals, business owners and financiers to identify transaction risks and opportunities. This enables them to make informed decisions.

For purchasers, we review a target business’s financial statements/projections, asset quality, product lines, customer base, management and operations. We assist vendors to divest all or part of their business by preparing an in-depth report on its financial health to address potential buyers’ concerns.

For our clients and their advisors, we also establish and maintain a virtual ‘data room’ of original documents, contracts and other information pertinent to the transaction.

BRI Ferrier can facilitate informal arrangements for financially distressed businesses as an alternative to administration or liquidation.

Informal arrangements might include:

  • negotiation of standstill agreements with financiers
  • repayment agreement or limited moratorium between a distressed business and its creditors
  • stabilisation of business and identification of risk factors
  • assessment of management
  • compliance reviews
  • cash flow and working capital reviews
  • funding and other financial reviews
  • divestment of certain business operations or assets
  • implementing restructuring
  • developing an operational and financial restructure plan.

As informal arrangements usually don’t require third-party involvement, they can be a cost-effective option. They may, however, offer only a short-term solution.

Here is just one example of our experience in facilitating an informal arrangement:

Past Experience:

Forest Resort
BRI Ferrier was engaged in April 2014 to assist Forest Resort, which operated a business in Victoria’s central goldfields region comprising a 143-room Novotel hotel and conference centre, a championship golf course, a land subdivision and a waste-water treatment plant (WWTP). Key areas of concern were a cash burn of over $1 million per year, static revenue levels and ongoing poor trading performance, incomplete and poorly maintained development, declining hotel service standards, fractured ownership and the WWTP. We traded the business to stabilise operations prior to marketing for sale, improved hotel operations and marketing, streamlined the room owners’ return model, stabilised the golf course short-term trading performance, maximised land sale value and closed the WWTP. Sale of the resort settled on 5 November 2015, at a price almost 50% above the most recent independent valuation.
Bri Logo

who we work with

Works closely with a range of business stakeholders, including financiers, solicitors, accountants & creditors, as well as the directors of businesses in financial distress.

Financiers

Empowering financiers with tailored solutions to secure their investments.

Solicitors

Partnering with solicitors to navigate complex legal landscapes with precision.

Accountants

Collaborating with accountants to ensure accurate financial management.

Creditors

Assisting creditors in recovering their dues efficiently and effectively.

Company Directors

Guiding company directors through financial distress with expert advice.