Case Study 2 - Turnaround Management
Brisbane Concrete Pumping Group - Turnaround Management
Background
Brisbane Concrete Pumping Group, Queensland's largest concrete pumping business with a blue chip client base and 80 employees, found itself struggling under bank debt of $22 million. For the past two years they had reported trading losses and the loss for financial year 2008 was about $2 million. BCP appointed Vantage Performance in October 2008 after the business had been placed in Receivership and Voluntary Administration.
Key issues
- Group was in Receivership and Voluntary Administration
- Refinance was not an option
- Group was over geared
- Lack of management depth
- Poor working capital management
- Additional working capital required
- Major debt reduction required
- Core business still viable
Key Initiatives
- 13 week cash flow & detailed integrated forecasts
- Capital raising
- New management team
- Retain stakeholder support
- Produce strategic business plan and Deed of Company Arrangement proposal
- Negotiate with Receivers, Voluntary Administrators, creditors and all 8 financiers
Outcome
- Proposal was approved by 100% of creditors
- $2M in fresh working capital
- Bank facilities restructured
- Material reduction in bank debt
- Stakeholder relationships restored
- Conclusion of Receivership and Voluntary Administration
- Control returned to directors