Restructuring refers to reorganising or changing a company’s financial or operational structure, usually under financial duress. It can be a strategic decision or a response to crises such as declining sales, rising costs, or debt problems

Signs a business needs large impactful transformation

Financial indicators: Declining revenues, increasing debt levels, and irregular cash flow are the key warning signs of business crises and highlight a need for restructuring. These factors show that not everything is going well for a business; they can impact profitability, create cash flow problems, and lead to legal and financial consequences.
Operational indicators: Operational inefficiency due to outdated systems, technology, or processes can impact the performance and profitability of a business and create a need to restructure departments or alter organisational design to reenergise it.
Market indicators: In case of unfavorable market conditions, loss of market share or revenue, and declining customer base, restructuring of a company’s value proposition or positioning can be a key strategy.
Strategic indicators: Divergent interests and priorities among stakeholders can hinder progress. Restructuring to ensure stakeholder engagement, alignment, and integration efforts can be crucial for business growth.

The impact of a Chief Restructuring Office (CRO)

A thoughtful and well-structured approach to restructuring can significantly aid companies facing financial or operational challenges. A dedicated restructuring office has the capability to plan and execute strategies that help companies navigate turnaround situations.

CROs possess the skills needed to navigate crises, manage cash flow, and explore options like raising equity, debt restructuring, or divestitures. They can even guide insolvency processes. Additionally, CROs reassure creditors by demonstrating a company’s commitment to addressing challenges and maximizing value, thereby fostering trust and accountability.

CROs include teams of restructuring and turnaround specialists who leverage their combined expertise in finance, operations, and turnaround management to guide restructuring processes. These teams analyse a company, develop, and implement restructuring plans, ensure adherence to legal and regulatory frameworks, manage relationships with creditors and stakeholders, and keep them informed at each stage to secure their support. These teams often work directly with company management, to stabilise financial and operational performance through comprehensive plans. This allows management to focus on day-to-day operations.

Different types of Chief Restructuring Office (CRO) services

The CRO provide a range of services related to specific turnaround challenges faced by a company or its management. They also offer access to a network of expert turnaround and restructuring specialists and advisors who can help navigate difficult situations. Some of the key services offered by CROs are:

Stabilisation of operations

CRO’s priority is to stabilise a company, while also developing a restructuring plan that focuses on streamlining operations, repairing balance sheets and reporting processes, and identifying cash-saving opportunities, to set the company on a better path.

Solutions for specific challenges

Operational restructuring: These services help companies improve their operational efficiency and effectiveness. CROs work with companies to identify areas of process improvement, cost reduction, and profitability enhancement. Operational restructuring services may include organisational restructuring.
Financial restructuring: Experts in CROs study debt and capital restructuring options, oversee negotiations with stakeholders, and develop a comprehensive financial restructuring plans to restore stability.
Turnaround of distressed/underperforming companies: When a company is facing financial difficulties, CROs work with its management team to develop and implement a turnaround plan that improves financial performance and helps avoid bankruptcy. CROs also offer services related to debt restructuring, cost-cutting, management of bankruptcy proceedings, negotiation with creditors, etc.
Transaction advisory: These services are used by companies that are considering or undergoing a major transaction, such as a merger, acquisition, or divestiture. In such cases, CROs provide financial and operational due diligence and help companies negotiate the terms of transaction. Other services may include transaction structuring, valuation analysis, negotiation support, etc.

Benefits of leveraging a Chief Restructuring Office (CRO)

Restructuring requires unique skills and experience that are often unavailable within organisations. Chief Restructuring Office (CRO) fill this gap and provide the expertise needed to successfully execute a restructuring plan, thus allowing the management to focus on operations.

Restructuring advisors have proven stakeholder negotiation skills; they can move quickly to implement changes and halt further decline. They act as an honest broker between parties and in the interest of all stakeholders, thereby providing creditors and the board with an independent overview of a situation. This helps build assurance that the company is taking important steps to address its problems and maximize its value.

Specific situations where Chief Restructuring Office (CRO) services can be helpful

Internal

Financial distress: Liquidity issues (high debt, negative cash flow, impending bankruptcy) and deep-seated issues like inefficient processes, outdated technologies, operational inefficiency
Strategic or management problems: Poor leadership, internal conflict, failure to adapt to changing customer preferences, lack of technological advancements, low employee morale

External

Market pressures: Economic downturn, disruptive technologies, regulatory changes, changing consumer behavior
Unexpected events: Complex M&A integration, data breach, product recall, natural disasters

Why Eight Advisory as a Chief Restructuring Office (CRO) partner?

Are you facing financial distress, operational upheaval, or industry disruption? Don’t navigate the treacherous terrain alone. Eight Advisory is a trusted CRO partner who stands ready to chart your path towards business stability and success.

Personalised solutions:

Eight Advisory’s CRO works directly with management teams to implement comprehensive business restructuring/recovery plans to help stabilise financial and/or operational performance.

Unique blend of analytical and functional expertise:

We combine our innate ability to communicate numbers, concepts, and solutions to restructure balance sheets and revitalize operations.

Proven expertise:

We include experts from myriad backgrounds, ranging from CEOs who have led successful turnarounds to CFOs with extensive financial restructuring experience, all of whom are used to working in the restructuring, turnaround, and crises management space.

At home under pressure:

At Eight Advisory, we have hand-picked members of the CRO. These members have proven that they can thrive under pressure; their situational experience allows them to be calm, undistracted, and highly effective under immense demand.

We’re invested in your long-term success. We help businesses not just survive but thrive by building a sustainable future for them.

Let’s discuss your unique situation and craft a personalised growth roadmap. Together, we can navigate every storm and emerge stronger than ever.

Contact Eight Advisory experts for a consultation.