Weathering the Storm Part 4: Restructuring Strategy Considerations

  |  June 2, 2020

image of four people working together around a table

With the outbreak of COVID-19, companies are facing tough decisions and looking at their operations and debt to identify changes to help weather the storm. If you are considering restructuring some or all operations and debt obligations, we recommend you:

  1. Review debt obligations and required covenants.
  2. Review capital commitments to identify what can be delayed or terminated without significant disruption.
  3. Renegotiate terms or cancel vendor/lessor contracts.
  4. Review headcount and optimal human capital needs, workforce reduction or relocation costs, and severance costs.
  5. Review physical facility needs and consider a shutdown or consolidation of facilities.
  6. Identify efficiency initiatives across the business processes.

Companies should be proactive in identifying cash flow opportunities and risks and establish a plan to tackle each item. Difficult conversations are not enjoyable but being proactive in speaking with lenders and key suppliers and customers is an important step.
Watch for our next posts on Cash and Accounting Impact Considerations related to restructuring.