Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Thursday, 30 July 2009

Exciting news for AIM / Plus Markets or PE backed companies looking for equity, debt and mezzanine finance.

Four Turnaround Funders looking to fund your distressed business !

KSA has close relationships with four high quality Turnaround Funds. They have an appetite for good businesses that are in a distressed situation. If you are a director of an AIM listed company, Plus Markets company, or private equity backed company then contact Keith Steven for a confidential chat.

To qualify for an initial appraisal and meeting with a KSA senior director you will need to have up to date management accounts, a business plan synopsis and a willingness to consider change and funding linked to a powerful company voluntary arrangement, pre-pack administration or informal turnaround plan.

Our long years of CVA and rescue experience are essentially the reason why these 4 funds have approached KSA. Our decision whether to involve one or more of these funds will be final and we will not introduce you to these funders unless WE believe that there is a viable proposal.

Call Keith Steven now on 07974 086779

Wednesday, 29 July 2009

Free Experts Guide to Company Voluntary Arrangements

Just a reminder to Blog followers that you have exclusive access FREE TO DOWNLOAD!

Get our Complete Experts Guide to Company Voluntary Arrangements.

If you are looking at restructuring options for your company or that of a client, our 80 page guide to CVA's is the only guide you need to this excellent rescue tool.

FAQ's, flowcharts, guides, case studies, tips of the trade and case law: all in one PDF that's easy to use or email.

Simply click here for instant free, safe download
http://www.companyrescue.co.uk/company-rescue/options/documents/KSAExpertGuidetoCVAV1KS080929.pdf

Swine Flu, big business threat? Common Sense required

Unfortunately one of our team has been diagnosed with Swine Flu this week

She went home last week not feeling well and has been quite poorly since. Her doctor has confirmed the SF diagnosis this week and she will need to stay off work for a few more days.

We all read about the bug, but it brought home to me what a risk it may be to businesses if not handled properly.

The guidelines provided here

http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_097137?IdcService=GET_FILE&dID=189550&Rendition=Web


are useful for the employer and employees to follows. Most of it is common sense of course but it is certainly worth reading. Business is hard enough in this recession without having a major threat from a virus! So some simple prevention techniques in the guide are worth implementing.

Lets hope the virus does not grow rapidly as forecast in the colder weather of autumn and winter. Will we all get a vaccine? Will it work? What are the side effects?

Monday, 27 July 2009

Keith was too optimistic? Or too early to tell?

In my blog of 13th January 2009 I made the following prediction (amongst others)

"My first prediction is 1.5% drop in GDP in Q4 2008, this will take us firmly into recession when results are announced by ONS on 23rd January. We should expect a fall of 3.5% in GDP this year, 2009".

Many people said to me at that time "that's a bit steep Keith". Well the news on Friday 24th July was that the economy is probably on track for a larger fall than that. Many economists are now forecasting 4.5% or more fall in GDP in 2009.

Some are forecasting growth in Q3 and Q4, clearly they seem to be basing that on green shoots. The Treasury itself predicted that the economy would contract by between 3.25 per cent and 3.75 per cent in 2009, with signs of growth in the first half of 2010. They may still be right, but we doubt it and if I am right then borrowing will rise still further than the mind blowing sums already budgeted.

There will be some doubt of course about the GDP numbers in the minds of business when retail sales are rising, mortgage approvals are rising and commentators insist there is going to be a V shaped recession. Most boards are taking a more sanguine view and cutting costs to survive. It is surely better to see the order book rising and then take on people and costs than build it on rhetoric. To that end a trade off on employment seems to be taking place.

One of the most interesting numbers discussed recently is the circa 1m people who are now in part time work having been full time employees. Many companies like British Airways, accountancy firms, law firms and services companies seem to be trying to hold off redundancies by keeping people employed, albeit on lower income levels. Smart move or deferring the inevitable? Only time will tell.

So, now that we have the half time scores for 2009 (before revisions) I will revise my forecasts to over 4.5% GDP reduction in 2009.

What of 2010 which is now only 5 months away? With the certainty of the following I cannot see 2010 being a year of much growth either:





  • Tax increases from April 2010 (already in the pipeline)
  • Increased unemployment by a further 500-750,000 people by end 2010
  • Huge credit card defaults
  • £300bn of UK distressed property debt which needs refinancing over next 24 months
  • VAT to rise on 1st January 2010 to AT LEAST 17.5%
  • Rise in Government's borrowing requirements
  • Uncertainty that will be caused by a general election which must be held in the next 10 months


So no green shoots from me!

Friday, 24 July 2009

Encouraging Company Rescue

Well we have never needed any encouragement but this is actually a serious Blog!

The Insolvency Service has issued a consultation paper as per the link above with regards to beefing up of the legislative framework for Company Rescues and Company Voluntary Arrangements (CVA's) in particular.

The fact that Government wants to encourage more CVA's is very encouraging for CVA practitioners like KSA. We have often been a lonely champion of the CVA tool. Now many larger insolvency practitioners are looking again at CVA as a great rescue approach in appropriate circumstances. Pre-pack and "plain vanilla" administrations have their place, as does administration followed by CVA.

With the news From The Times July 21, 2009 - Pre-pack bankruptcy accountants 'mocking rules' that 35% of pre-pack administrations don't comply with the rules and guidelines (SIP 16)and that the Insolvency Service is taking aggressive action against dozens of insolvency practitioners, I strongly believe CVA is the best insolvency method available for viable businesses. It is also less risky for practitioners, whilst maximising creditors interests.

Perhaps the insolvency profession will have to work harder WITH MANAGEMENT, SECURED AND UNSECURED CREDITORS and new funders(?) to ensure CVA's are used to protect and preserve companies.

So, what does the Government want to consult about? In particular, the proposals consider:

􀂃 extending to medium and large-sized companies the option of a
moratorium against creditor action - currently only available to
small companies - so they too can benefit from a “breathing
space” in which they can seek to agree with their creditors a
means of securing a company rescue by means of a Company
Voluntary Arrangement;

􀂃 the introduction of a new court-sanctioned moratorium available
to all companies; and

􀂃 providing greater security to repayment of monies loaned post CVA or administration, to allow firms in difficulties to access the
funding they need to get back on track.

We will publish our response to this in due course, meantime I would welcome
any comments from our clients, past clients, advisors, colleagues and advisors.

See here for the PDF on Company Rescue published by the Insolvency Service and here for the report on SIP16 by Insolvency Service.



Any questions or views please Blog/email or call me - 07974 086779

Thursday, 2 July 2009

75% of all private equity backed exits end in "receivership"

Nottingham University Business School's Centre for Management Buy Out research also reports that 86% of all exits where the MBO value was under £10m are into administration or receivership.

This is frustrating when some could possibly have been restructured using company voluntary arrangements (CVA)?

This report has been widely covered today in the financial press, with many comments made on over gearing and too much leverage.

A cogently structured CVA could lead to protection of senior debt holders exposure and or a haircut, a dividend recovery for some of the junior debt holders and of course the trade and tax creditors. CVA is as powerful as administration in most situations and is MUCH LESS damaging to the underlying business.

See our case study for Futuremedia plc as a good example of innovative CVA restructuring.
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