In the space of the last month, the world has retreated into quarantine due to the coronavirus (COVID-19) outbreak. This global health crisis is unprecedented in terms of breadth and scale, with far-reaching economic and financial consequences. Above all, we hope you, your family and friends, and your colleagues remain safe and resilient during this challenging time.
In these extreme and unpredictable conditions, BTG Advisory can play a critical role in helping you navigate the uncertainty and manage your UK investments effectively across a range of specialist sectors.
There are two broad areas to focus on: reviewing your existing portfolio and positioning for future deal flow. Briefly, we would like to outline how we can help you with both in the context of the evolving economic, financial, regulatory and legal landscape.
The immediate priority is to re-evaluate your existing portfolio to identify which investments are affected by the disruption and what your options are going forward. In the last few weeks, our clients and broader network have asked our advice on their options. In the context of suspension of normal trading, freedom of movement restrictions, and collapsed demand, we are being asked:
- How should tenants prioritise rental obligations in light of the Coronavirus Bill which prevents eviction if rental payments are missed in the next three months?
- What options do landlords have to respond to this eviction moratorium to protect their own cash flow? Do landlords still have enforcement rights over on-site assets, stock and machinery?
- For vulnerable companies, how should the new insolvency measures announced by the UK government to protect businesses against forced insolvency proceedings be best employed to stabilise their business?
- How have our directors’ responsibilities changed in this environment?
- What recourse do creditors have in this period where normal legal action is suspended? What are the implications for opportunistic investment in this environment?
The UK government is providing businesses affected by COVID-19 with time and space to evaluate their options, which may include the need to restructure. We are ideally placed to help you evaluate and improve liquidity in your portfolio companies. Measures may include:
- Short-term cash flow analysis and prioritising liabilities;
- Negotiating standstill agreements and interest holidays with creditors;
- Raising fresh equity through joint venture partners and investors;
- Negotiating refinancing with existing and new lenders;
- Releasing trapped liquidity across the assets of your businesses; and
- Identifying a realistic time frame for accessing government support schemes.
The existing management and strategy for many of your portfolio companies will now longer be relevant. As restructuring professionals, this is what we do. Please get in touch to see how we can lighten the load.
Positioning for deal flow
BTG Advisory is already working with businesses across a range of specialist sectors – including retail and hospitality, professional services, real estate and construction – to manage many of the issues outlined above.
Please do register with us if you are in the market to provide equity or debt finance to such businesses. We can assist you in the pre-investment due diligence in the context of this unique environment, including identifying applicable government support schemes and realistic access time frame. BTG Advisory also has extensive experience in debt-for-equity restructurings and has strong lines of communication with all the major commercial and investment banks and lenders operating in the UK.
At a time when normal working environments and information channels are disrupted, outsourcing portfolio management is both prudent and proactive. We can be a key channel for information, advice and strategy in this period.