Many small and medium businesses have seen a dramatic slow down and are having difficulties in surviving due to the economic downturn. Before you are claiming `Game over for your business', have you ever considered a CORPORATE RESTRUCTURING exercise (other may address it as CORPORATE RE-ENGINEERING exercise) to turn your company over to a new leaf.

When a company is having trouble making payments on its debt, it will often consolidate and adjust the terms of the debt in a debt restructuring. After a debt restructuring, the payments on debt are more manageable for the company and the likelihood of payment to bondholders increases. A company restructures its operations or structure by cutting costs, such as payroll, or reducing its size through the sale of assets. This is often seen as necessary when the current situation at a company is one that may lead to its collapse. (Source: Investopedia)

A significant rearrangement of a firm's assets and/or liabilities. A firm's restructuring may include discontinuing a line of business, closing several plants, and making extensive employee cutbacks. A restructuring generally entails a one-time charge against earnings. (Source: youdictionary.com)

Corporate Restructuring is more likely to be successful when managers first understand the fundamental business/ strategic problem or opportunity that their company faces. In our opinion, there are few practical procedures in business restructuring that particularly useful in any financially distressed organisation:

(1) Reorganise your Management Team

You will need to have in place a trusted leadership team in your organisation. This team should not be the same one as what got the firm into trouble. For a Private Limited Company, this exercise can be implemented by way of CHANGE OF DIRECTORSHIP in your company. We recommend that you remove any leader on your team that is not open to radical change or unwilling to support you through the business restructuring.

(2) Restructure your Company Debts

You need to communicate with your bankers and creditors about your firm's predicament. Propose an repayment plan. This has to be prepared in an early stage, do not wait until `last minutes'. Particularly with the banker, never let your company account falls into Non-Performing Loan state as it will affect your records.

Raise funds by selling off your unprofiable assets and divisions. Speed up collections of your accounts receivable will increase your cash flow significantly. If your company is a Private Limited Company, you may arrange to call among the existing shareholders a INCREASE OF AUTHORISED CAPITAL/ PAID-UP CAPITAL or bring in new shareholders after passthrough an Extraordinary General Meeting. If you plan well with this additional working capital being injected to the company, it will not only overcome your financial difficulties but also bring your company growth to a greater height.

(3) Revitalise your Company

You may decide to refresh your existing old company to a new and better one, as the old one recalls you the scenes of the company profits been waned and customers walked away. Refresh the energy within the company by way of CHANGE OF COMPANY NAME or CHANGE OF OFFICE (REGISTERED OFFICE ADDRESS) or CHANGE/ REORGANISING OF THE EMPLOYEES in the office. In the other hand, you also need to cut the product/ service or area that is unprofitable in the company.

We provide advisory and assistance in carring out your Corporate Exercise.