Restructuring: Act now and avoid crises!
Experts from STU MANAGEMENT PARTNERS report from the field.
The situation is deceptive: According to the Federal Statistical Office, the number of corporate insolvencies fell by 9.2 percent in the first half of 2014, compared to the previous year.
However, after more bankruptcies were registered by economically important companies, the potential damage increased dramatically. Creditor claims in the amount of 14.6 billion euros have been recorded in the first half of 2014 – over 4 billion euros more than in the same period last year!
In this connection, the association of insolvency administrators in Germany (VID) points out the fact, that many companies show a low or even negative equity and in many cases do not pay their bills on time. The VID currently expects approximately 270,000 German companies not to be financed adequately.
Stefan Ulrich, managing partner of the consulting and management firm STU Management Partners, confirmed the situation: “The continuing low interest rates and the previously robust economy obscures the need for action for many companies. Forward-looking executives have recognized the opportunity and already initiated restructuring programs. If conditions deteriorate once, the room for action is very tight for many businesses!”
STU supports companies in the areas of growth / internationalization, operational excellence and turnaround/ restructuring. The Manager of the STU help to recognize the need for action at an early stage to develop customized restructuring concepts and implement them successfully.
For many businesses, a comprehensive operational and financial restructuring is the only way to an economically sustainable future. In emergency situations, there is often a high pressure to act.
The STU Manager hereby adopt a pragmatic and results-oriented approach. First, the required priorities in terms of liquidity are being set. Then a short positioning of the company takes place (so-called „Quick-Check“), followed by the development of a reliable restructuring or reorganization plan, mostly based on the German industry standard IDW S6.
Already during the analysis and design phase, the STU managers communicate with all involved stakeholders and arbitrate, as necessary.
As soon as possible, the necessary change processes are initiated and pursued with focus on speed and measurable results. If desired, a STU Manager joins the executive management team as an active member at the client´s company for a defined period of time.
For a fast effective and sustainable restructuring success, the following points are critical:
- Quick creation of transparency as to the company’s situation and risks
- Focus on really important levers for improving the situation
- Creating a tight implementation timetable with clear responsibilities
- Acceleration of change through small, successful implementation steps
- Consistent measurement and control of the implementation process
- Transparent communication of objectives and progress to all stakeholders