Propco is a large integrated property development and investment business which invests in light commercial and retail properties and undertakes large scale residential developments.
It has investments and developments throughout the UK and Europe and operates via a complex network of companies, joint ventures and development partnerships. Financing is also very complex with multiple interdependent financing structures and cross guarantees.
The differing nature of the two sides of the business (investment and development), a complex corporate structure and financing arrangements meant that navigating the ups and downs of a changing property market were proving to be extremely challenging.
This became particularly apparent when a downturn in property value led to significant financial distress for the company. This distress was amplified by the fact that:
The work resulted in a range of recommendations that were agreed to by the board. The recommendations were implemented by management over the next twelve months.
The benefits of implementing these recommendations have been considerable. They include:
Overall, these changes have significantly improved the financial position of the company, taking it from the brink of insolvency to financial stability and sustainability. The changes have also enabled the board to once again focus on strategic growth, rather than short term survival.