Flashback to better outcomes from ‘work outs’ “waaaaaay” before it was safe to enter the harbour

We’ve long been an advocate for safe harbour principles years before the legislation was enacted. I reflected on this recently when I cast my mind back to a ‘work out’ we undertook for Living and Leisure in 2007.

Living and Leisure faced a cash crisis during the summer quiet months when its parent was suffering financial stress and could not meet its funding commitments to Living and Leisure.

Here are the top five components of our safe harbour approach we implemented then, which are now the foundation for a ‘safe transformation’ now under new laws:

1. First and foremost, we established a turnaround plan designed to lead to a “better outcome” than administration
2. The plan was signed off by restructuring experts – PPB Advisory
3. We established three-way budgets to ensure robust financial reporting
4. Worked proactively with creditors to manage expectations and garner support for the turnaround
5. Plugged a $32 million cashflow hole through a combination of –

• noncore asset sales
• accelerated debtor collection programme
• critical creditor negotiation
• bank forbearance
• restructured capex programme

PPB Advisory guided the directors through a difficult period implementing a strategy to save the company over nine months.

The new safe harbour laws are making workouts such as these easier to adopt with a stronger framework and more certainty for directors

PPB Advisory welcomes the changes and we are confident this will result in more positive outcomes for directors.

By way of background, Living and Leisure owned a number of aquariums in the Asia-Pacific region, including the Melbourne Aquarium, two ski fields in Victoria, UnderWater World on Queensland's Sunshine Coast, as well as other attractions.