Restructuring – Reporting and Forecasting

Following a period of strategic review and restructuring due to a fall in profitability, we supported the finance team to transform its forecasting and reporting processes, delivering clarity, efficiency, and confidence to management and a diverse group of stakeholders. By replacing fragmented legacy approaches with a streamlined, integrated solution, we enabled management to focus on what matters most: robust scenario planning, stakeholder engagement, and value creation in a complex capital structure.

The Client’s Challenges

The company was required to restructure and needed to present a robust five-year business plan to a wide range of stakeholders, including multiple secured and unsecured bondholders and its incumbent private equity backer, with limited time and resources. The company faced several critical challenges:

• Complex Capital Structure: Multiple secured and unsecured bondholders, alongside an incumbent private equity backer, created a challenging environment for stakeholder management.
• Significant working capital swings: As an insurance broker, the business had a high volume of funds flowing through the business which were poorly understood and modelled on a crude basis. There was a need to quickly understand the gross and net cash flows and make sense of the operational cash conversion.
• Demanding Stakeholder Engagement: Management was required to engage with numerous parties including senior and junior lenders, their advisors as well as the current owner. Each stakeholder had their own distinct interest and requirement.
• Scenario Flexibility: The business needed a model capable of flexing for various restructuring and refinancing scenarios, in order to support both strategic planning and negotiations.
• Time pressure: Preliminary information was needed for stakeholders within a three-week period in order to meet the external time constraints of several stakeholders and their credit committees.
• Resource Constraints: The pressure of preparing information for stakeholders and the vendor due diligence (VDD) as well as ongoing reporting, placed significant demands on management’s time and resources.

These challenges risked undermining the credibility of the business plan and delaying progress on the restructuring strategy.

Our Solution

Building an Integrated, Flexible Forecast Model

We worked closely with management, Deloitte, and the CRO to deliver a fit-for-purpose modelling solution:

• Fully Integrated Monthly Model: Developed a Group P&L, Balance Sheet, and Cashflow forecast for five years, with a user-friendly dashboard to switch between scenarios and apply sensitivities.
• Scenario Analysis: Designed outputs to identify potential cash pinch points and covenant breaches, supporting proactive risk management and mitigation.
• Analytical Tools and commercial outputs: Included easy-to-use lookups and graphs for P&L, working capital by division and Balance Sheet rapid review, facilitating detailed analysis of forecast assumptions.
• Dynamic Funding Module: Built to reflect complex funding structures, supporting negotiation and strategic planning.
• Acquisition and Disposal Module: Enabled analysis of different acquisition/disposal scenarios, with outputs automatically created that were then presented to the senior executive team.
• Stakeholder Engagement: Presented the model to the full VDD team and acted as the first point of contact for queries and follow-up. Supported presentations to secured and unsecured bondholders and their advisors, demonstrating the credibility and achievability of the financial forecast.

The Impact

• Foundation for Restructuring Strategy: The model became the cornerstone of the company’s restructuring presentation to lenders and stakeholders.
• Confident Stakeholder Engagement: Management was empowered to present a range of restructuring and refinancing scenarios with clarity and confidence.
• One version of the truth: Underlying operational and financial metrics were cleansed and reconciled as they were fed into the model to create a consistent, historic and forecast datapack.
• Ongoing Value: The model was incorporated into monthly reporting, providing lasting value beyond the immediate transaction and supporting ongoing strategic decision-making.