Disposal of distressed or non-core businesses

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As markets and businesses evolve, many owners and business managers find that adjustments need to be made. Often this can involve selling all or part of a business that no longer performs to its potential, or no longer fits the strategic vision. Such disposals are commonplace, and a sign of strong management and active ownership.

Non-core assets develop in many contexts and are common across the CIS. These could be non-performing loan portfolios, branch networks, or entire subsidiaries of financial institutions, for example, or real estate portfolios in corporate groups, or parts of conglomerate businesses that have evolved over time and now need to be rationalised.

Potential issues

  • You need an independent third party to help you determine what is core and what should be sold. We help our clients challenge their business plans and generate focus.
  • Once you decide what should be changed, time and energy has to be applied to achieving the separation even before any disposal is contemplated. For banks, this can involve “good bank/bad bank” arrangements, as well as dedicating and training staff to operate in a workout environment. For corporates, this can involve a range of HR and legal procedures to clean up and segregate the go-forward operations from those which need to be rationalised or sold.
  • Disposing or shutting down those non-core elements involves valuation, market sounding and positioning, as well as seeking out those parties for whom the assets offer value.

Services we offer

  • Strategic consulting support, ranging from an overall appraisal of plans through to full rationalisation of business operations; we can develop a plan with the client or use one that we have already tested
  • HR, legal, tax and other advice to ensure that the process is optimised and unnecessary risks and costs are avoided
  • For financial institutions, this includes portfolio analysis and linking disposal transactions to the more than 100 investors that cover the Asian, European and US markets
  • Once businesses are ready, we provide a full range of M&A services

Benefits for our clients

  • Better management focus on the core business and distractions are removed
  • Realise cash, and likely achieve some accounting and fiscal benefits along the way
 
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