Restructuring Advice

The business consultancy Angermann supports SMEs with restructuring. Customized to your business's situation, we offer the development of a conceptual basis – company review, continuation plan or comprehensive restructuring plan – in a first phase on the way to economic stabilization. Building on this, we advise you on the implementation of the restructuring measures formulated.

Company Review

Using our outside view, we analyze the economic starting situation of your company. We create transparency as the common basis of collaboration across all areas. Weak areas are identified and potential to increase earnings is found.

Four factors are relevant for portraying the economic starting situation:

Net-Earnings Position, Net-Worth Position and Financial Position (of the last three financial years)

Organization and Processes

  • Company and organizational structure
  • Business processes
  • Control tools
  • IT

Strategic Market Position

  • Product and service program
  • Customer and sales structure
  • Competitor structure
  • Supplier structure

Segment Income Statement

focused on market cultivation by

  • product group
  • customer/sector
  • region

The aim of the company review is to show you the way to further development of the company on the basis of its economic starting situation.

Business Planning

  • Revenue and earnings planning
  • Financial and cash-flow planning
  • Balance-sheet planning

Measures

  • Strategic direction
  • Structural change
  • Operational restructuring

Restructuring Plan

The scope of and level of detail in a restructuring plan are determined by the requirements of investors, particularly of external financial partners, the economic situation of the company and the desired period until a statement is made on the business's capability of being restructured.

Continuation Plan

A continuation plan individually explores the company’s economic starting situation and the causes of its crisis. This leads to a restructuring report that aims to review and establish the company’s capability of being restructured. The company is considered to be a going concern if there are no elements of bankruptcy, such as an impending inability to pay and/or liabilities in excess of assets in the period under review (the current and subsequent financial year), and a profit can be achieved on a sustainable basis.

The requirements for a restructuring report arise from the legally binding minimum requirements of the German Federal Court of Justice (Bundesgerichtshof) for restructuring plans.

 

Legally binding minimum requirement of the German Federal Court of Justice for restructuring plans

  • The restructuring report is based on the known and identifiable actual circumstances of the company and is implementable.
  • The necessary accounting documents from the company were provided.
  • The restructuring report contains an analysis of the company's economic situation in the context of its economic sector and covers the causes of the crisis.
  • An appropriate assessment of the net-earnings, net-worth and financial position of the company will be made.
  • The company is objectively capable of restructuring and the measures specifically initiated are overall objectively suitable for drastically restructuring the company within a short period of time.
  • The planned restructuring measures were introduced in an objectively appropriate manner.
  • The restructuring report contains a conclusion with a clear statement on the company’s capability of being restructured.

 

 

Procedure for creation of a continuation plan:

  • Analysis of the net-earnings, net-worth and financial position (of the last three financial years)
  • Analysis of the economic starting situation of the company in its economic sector
  • Identification of possible causes of the crisis
  • Developing a restructuring plan together with the managing directors
  • Development of a business plan with income, cash-flow and balance-sheet planning taking account of the effects of the restructuring measures.
  • Business planning and the restructuring plan serve as the basis for judging a going concern prognosis.

Comprehensive Restructuring Plan

Like the continuation plan, the comprehensive restructuring plan leads to a restructuring report. The requirements also arise from the legally binding minimum requirements of the German Federal Court of Justice for restructuring plans. In addition, the IDW S6 standard developed by the Institut der Wirtschaftsprüfer provides requirements and structures for a restructuring plan. The analyses and planning period are much broader compared to the continuation plan. For example, the review of the starting situation also includes a review of the business strategy and its implementation.

A further addition is the formulation of strategic measures, such as relocating production sites or adding a new line of business. The planning period of the earnings planning and the associated cash-flow and balance-sheet planning is three to five years. With a comprehensive restructuring plan, the business planning also includes a scenario analysis that enables the impact of various measures to be included.

IDW S6

IDW S6 describes the “requirements for preparing restructuring plans” and is binding for auditors. The standard is also taken into account by consultancy companies and specialist lending departments of financial institutions. IDW S6 defines a multi-stage approach to auditing a company’s capability of being restructured.

Implementation of the Restructuring

As part of the continuation plan or comprehensive restructuring plan, a restructuring timetable is created. The measures formulated are approved by the managing directors as implementable and to be implemented. The systematic implementation of the measures formulated is necessary for sustainable restructuring.

Angermann Consult GmbH supports you in systematically implementing the previously developed strategic, structural and operational restructuring measures. In so doing, we can integrate the services offered by our Real Estate, Machinery & Financing and M&A divisions. Informative reporting and a timely measures-controlling procedure guarantee the transparency necessary for the restructuring process.