Angermann Consult supports mid-sized companies in reorganising and restructuring. In the first phase on the way towards economic stabilisation and sustainable profitability, we develop a conceptual basis adapted to the company’s particular situation: a company review, survival forecast or fully integrated reorganisation concept. We then use this to support mid-sized companies in implementing the agreed restructuring measures.
A company review provides the basis for sustainable and successful restructuring, in addition to the formal requirements of a reorganisation concept. A comprehensive analysis of the company’s initial economic situation forms an important basis. The analysis identifies weak points and derives potential for revenue growth. The economic development is shown in an integrated company plan. In order to ensure transparency in the restructuring process, the company receives the structure of an informative report and a coordinated measure controlling system.
Four aspects are relevant when presenting the initial economic situation:
1) Revenue, finance and asset situation (of the last 3 financial years)
2) Organisation and processes
- Company and organisational structure
- Business processes
- Control instruments / integrated IT software architecture
3) Strategic market position
- Product and service portfolio
- Customer and sales structure
- Competition structure
- Supplier structure
4) Segment income statement
Orientated towards market development by:
- Product group
The objective of the company review is to show the way towards restructuring or further development of the company on the basis of the initial economic situation.
- Revenue and earnings planning
- Finance and cash flow planning
- Balance sheet planning
- Strategic direction
- Structural change
- Operational restructuring
An appraisal based on IDW [German Institute of Auditors] standard S11 guarantees a structured procedure in the economic assessment of reasons for applying for insolvency. In addition, measures are developed to ensure financing and therefore to avoid illiquidity and resulting insolvency.
Stocktaking and position determination:
- Creation of a performance-related and fiscal analysis
- Analysis and documentation of claims, liabilities, stocks and other liquidity drivers
- Development of additional evaluations and simulations which create transparency
Integrated company planning (profit and loss, finance and balance sheet planning), as well as short-term liquidity planning (cash management) and associated plausibility checks:
- Derivation of measures and translating them to the planning stage
- Finance planning with measures to ensure financing
- Short-term liquidity planning on a 13-week basis
Coordination with financing partners/stakeholders:
- Liquidity and equity development/over-indebtedness are bindingly estimated and documented
- The report is presented to the relevant stakeholders (after approval by the company management)
- Angermann Consult provides support in all the necessary negotiations with financing partners
When evaluating the survival forecast, possible reasons for insolvency (impending illiquidity/over-indebtedness) are identified. In addition, suitable measures are outlined to ensure the company’s financing /debt servicing capacity. The appraisal based on IDW S11 provides the legal and conceptual basis for the existing financing and for future loan decisions for the company management and its financing partners.
A reorganisation concept forms the basis for the assessment of a company’s reorganisation capability. An essential component of a reorganisation concept is the guiding principle of the renovated company (i.e. its future strategic, operative and financial organisation). In this process, appropriate measures are developed with the aid of a reorganisation roadmap.
The prerequisite for reorganisation potential can be expressed in five criteria:
How high are the future market opportunities of the reorganised company?
How strong is its competitiveness in the purchasing and sales markets?
Is the financing of the company ensured, with inclusion of the identified measures?
Is the company in a position to return to a profitability which is normal in the industry within an appropriate timeframe?
Is the management willing and able to implement the necessary measures to reorganise the company?
Are there any legal or factual reasons preventing reorganisation (e.g. insolvency reasons; see also survival forecast)?
In addition, the Federal Court of Justice (BGH) has prescribed legal minimum requirements for reorganisation concepts.
These minimum requirements have been summarised by the IDW in IDW standard S6. Applying this standard therefore provides orientation and a familiar framework for all the affected company’s stakeholders and, in particular, its financing partners.
Stocktaking and position determination
- Creation of a fiscal and performance-related analysis
- Evaluations of income origins
- Normalised income, if applicable
Identification of improvement potential
- Determining the causes of the crisis
- Identifying the stage of the crisis
- Assessing the essential core processes
- Translating individual solution approaches into specific action plans
- Evaluating the measures (qualitatively and in monetary terms)
Strategy and market positioning
- Market analysis
- Competitor analysis
- Analysis of core competences
- SWOT analysis
- Strategy definition and evaluation
- Guiding principle of the reorganised company
Integrated planning and presentation
- Translation of the derived findings into an integrated plan (profit and loss, finances and balance sheet)
- Acknowledgement of the identified measures
- Binding estimation of reorganisation capability
- Report presentation for the financing partners (after approval by the company management)
A reorganisation appraisal gives the company management and its financing partners legal security concerning the ability of the company to survive and/or be reorganised, as well as its obligations according to insolvency law. It creates transparency for relevant stakeholders, identifies the causes of a crisis and reveals the potential of the company. The overarching goal is the long-term reorganisation of the company with a return to a profitability level which is normal for the sector, and secured financing. Reorganisation concepts according to IDW S6 are one of the essential prerequisites for loan decisions (loan prolongation, bridging loans, suspension of redemption and deferral, collateral release and reorganisation lending).