Corporate Restructurings are on the up - but it’s not always doom and gloom.

Following a string of announcements in the aviation sector, including Boeing and Easyjet (amongst others), the motor industry (namely, Nissan, Renault and Mitsubishi) is now being required to restructure both its operational and corporate affairs, due to the unfortunate attrition the Covid-19 pandemic is having on consumers and businesses in the marketplace.

The reality is that corporate restructurings may have a negative impact on businesses such as, a decrease in its valuation, or in its investor relations and general public perception. Occasionally, it may even lead to the undesired sale of a valuable asset.

However, there are numerous positives in carrying out this process and restructuring your affairs, including the opportunity to: (i) increase efficiency; (ii) consider whether a business may benefit from entering into any short-term secured lending arrangements; (iii) the implementation of short-term corrective actions to identify weaknesses to better enhance your businesses' long-term prospects; (iv) dissolve and remove an unproductive subsidiary within your corporate group; (v) increase liquidity by the sale of an unused asset and eliminating non-value adding activities; and most importantly (vi) objectively assess your businesses' resilience and ability towards maintaining the necessary flexibility to adjust and adapt to the continuously changing nature and demands of the market in which it operates in.

Ultimately, while there may be some hesitation and resistance in entertaining the idea of restructuring your businesses' affairs, this should not be seen as all doom and gloom, but rather a chance to objectively assess (and seek to improve) your businesses' prospects in its adaptation to the new realities of the continuously changing market

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