Restructuring your business? Why and when should you consider it?

Article /21.08.2024

In the current economic environment and fluctuation in regional and global economies, many businesses are considering restructuring and/or rescheduling indebtedness, and Ethiopia is not left out.

Restructuring may be to improve business performance, to resolve financial distress, to focus on core strategic value drivers or to unlock substantial long-term value.

There are many restructuring strategies that a company can deploy such as repositioning, mergers and acquisition, turnaround, cost restructuring, divestment/divestiture, legal restructuring, spin-offs or divestments, debt restructuring or even partial exits.

At Grant Thornton Ethiopia, we have provided business diagnostic support to companies and developed restructure plans for various businesses. For instance, we supported a cement company in realizing of restructure plan with a successful buyout and debt restructure, a horticultural company in sale of assets and exit to another investor, a business diagnostic to restructure a family business leading to focus on key strategic areas for success of the group, and recently we supported a company in diagnosing its distribution and operation model. Etc.

Planning and executing a restructuring strategy is not a straightforward process or decision you can make. There are so many things to consider while undertaking a restructure; company’s law framework - it is critical to get the right legal advice at the outset and consider insolvency law framework; tax – any restructuring should be implemented on a tax efficient basis, implication on operations, staff and key stakeholders, interparty transactions, capital structure, value, financials impact, etc.

Today’s business owners and executives will continue to face difficulties on making right decision. At Grant Thornton Ethiopia, we have helped so many of you on business diagnostics and assessment, if not, this may be a good start to finding solutions to optimize your operations.

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A proactive approach benefits a company to improve finances, grow and expand business, optimize operational model and productivity, maneuver challenges in the sector the company is operating on.

Plan and execute your restructure strategy with Grant Thornton Ethiopia. Helping you to make the right decisions.

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