A pre-emptive action can always identify and correct a financing
problem before underperformance leads to a financial crisis.
Most underperforming companies are faced with unexpected financing challenges
ranging from reductions in line availability, replacing a lender to attracting more permanent equity financing. As
financial performance declines, the options and strategies that can be employed to create
liquidity and preserve value diminish dramatically. Internal cash sources, external
funding opportunities, divestiture values and negotiating advantages can erode quickly.
However, moving preemptively before the company's situation becomes commonly known allows
management to formulate turnaround strategies and plans to approach financing providers
for additional funding or extension of terms. In short, a preemptive action can identify
and correct a problem before financial underperformance leads to a crisis.
The key to a refinancing strategy almost always involves a credible turnaround plan for
presentation to financing sources. We maintain relationships with many sources of debt and
equity financing for underperforming and troubled companies and we are well positioned to
assist management in a financial restructuring plan.
