Restructuring Services

Independent Business Review

Independent Business Review (IBR) is an unbiased analysis of the current and future financial and operational condition of a company performed by an independent advisor that is supported by the advice of the financial stakeholders on the options available.

The objective of the Independent Business Review is to support the decision-making process by means of:

  • Giving an accurate picture of a company’s current debt;
  • Giving an accurate picture of a company’s operations and in particular their ability to generate cash flows;
  • Giving a realistic estimate of a company’s ability to meet its immediate and mid-term financial obligations;
  • Outlining the risks related to the recoverability of assets in the balance sheet, sufficient levels of provisioning and contingent liabilities;
  • Analyzing the quality of collateral provided to other lenders and the extent to which there is collateral that has not yet been encumbered.

Scope of our Independent Business Review services

The nature of our work as an independent advisor will depend on the specific circumstances of a given assignment. However, an Independent Business Review will most likely cover the following aspects:

  • Analysis of the market in which a company operates;
  • Review of the strategic position of a company (SWOT) including its business and financial strategies;
  • Analysis of historical and current trading performance and financial position of a company;
  • Financial projections review focused on cash flows available for debt service;
  • Analysis of viable debt restructuring options;
  • Sensitivity analysis and financial model assurance.

Successful acceptance of the optimal debt restructuring option by all stakeholders may be followed by monitoring of the progress in the implementation of the restructuring initiatives by the management of a company.

Market and Strategic Analysis

Market analysis
The analysis of the market in which a company operates should provide an insight into understanding the current position of a company on the market as well as the prospects ahead of the market and a company.

Strategic analysis
The strategic analysis is focused on the assessment of the operational and financial strategies chosen by the management of a company. Strategic analysis may be prepared in the form of SWOT analysis identifying strengths and weaknesses of a company as well as opportunities and threats to a company generated by the market environment.

Analysis of Historical and Current Performance

Historical trading assessment
Analysis of the historical performance of the business is aimed at identifying key trends and risks, reasons for the worsening of a company’s performance, changes to the business structure and their potential impact on future business development.

Current year trading performance
In order to assess the current year trading results, we will perform comparison of year to date trading versus prior year and versus budget, analysis of the last twelve months trading results, and analysis of the current year forecast outturn.

Financial position and liquidity
We will look at key balance sheet and cash flow items in order to assess quality of net assets, investigate potential liquidity issues and identify opportunities to generate cash. In particular, we will scrutinise net debt position of the business including potential adjustments for “debtlike” items, working capital development, and capital expenditure.

Financial Projections Review

Scope of financial projections review
In order to assess the quality and viability of the financial projections prepared by a company we will check historical accuracy of budgeting and forecasting, assess whether the assumptions applied are not unrealistic, examine the logic consistency of algorithms and mathematical correctness of the calculations, analyze the results generated by the calculation module and identify potential risks related to the viability of financial projections including potential risk mitigation actions.

Focus of the review
Financial forecasts prepared by a company need to be carefully reviewed in order to estimate cash flows available for debt service. When performing the financial projections review we will focus our efforts on the analysis of the assumptions related to operating revenues, operating costs, margins, working capital, capital expenditures, operating and investment cash flows: corporate income tax, proceeds from sale the of assets, dividends received, financing cash flows: breakdown of all loans with their principal repayment profile and interest costs taking into account the seniority of debt, and Macroeconomic assumptions: GDP growth, CPI, PPI, exchange rates (EUR/PLN, CHF/PLN), interbank rates (WIBOR, LIBOR, EURIBOR).

Short-term and long-term perspective
Depending on the project requirements we will perform the analysis in short-term perspective (forecast for a period up to 12-24 weeks), mid-term perspective (forecast for a period up to 6-8 quarters), and long-term perspective (forecast for a period of up to 3-5 years).

Debt Restructuring Options and Sensitivity

Debt restructuring options
The review of operating and investment cash flows constitutes the basis for the debt restructuring options analysis. The analysis of potential options will focus on review of all loan agreements between a company and the banks, analysis of collaterals, assessment of the condition and the value of the assets in order to understand the extent to which the banks are secured, review the debt restructuring options proposed by the management of a company, discussions with the banks on debt restructuring conditions and recommendation on optimal debt restructuring option that can be mutually accepted by a company and the banks.

Sensitivity analysis
As part of the financial projections review and debt restructuring options analysis we will perform a sensitivity analysis focused on key operating and financial assumptions applied by the management of a company in the restructuring plan.

Model assurance
The complexity of a company’s business may require the preparation of an advanced financial model. In such a case we may perform model assurance in order to provide comfort to the banks that there are no significant errors in the calculations, consistency with assumptions and financing documentation and that the results generated by the financial model are reliable.


Tomasz Ochrymowicz

Tomasz Ochrymowicz

Partner, Financial Advisory

Tomasz has over 18 years of transaction experience in valuation and financial modelling gained throughout numerous engagements across Central and Eastern Europe. Although Tomasz focuses primarily on t... More