Financial Restructures
Helmsman have invested in many companies which need to restructure their balance sheet to provide funds for a range of purposes including a reduction of gearing, acquisitions, reduction of trade creditor obligations or fund a revitalization of performance.
Helmsman only invests in a financial restructure when the investment is supported by a robust business plan that aligns management’s objectives with ours and addresses any underlying weakness in the competitive positioning so that profitable future trading can be reasonably forecast.
Operational Turnarounds
Investing in operational turnarounds is central to our Special Situation focus. Companies can find themselves underperforming as a result of, for example:
- an unsuccessful product diversification;
- an acquisition which did not meet its benchmark returns and has drawn investment funds away from the core and historically profitable products/divisions;
- changes in key management which detrimentally affected performance; or
- the emergence of a new competitor with a different and lower cost base through better use of technology or new and different suppliers.
We are not afraid of backing our skills and that of a management team to achieve a turnaround particularly where our analysis has diagnosed the reasons for the losses and the necessary changes to the business metrics are not difficult to achieve.
Industry Restructurings
Industry restructurings will often occur following changes in an industry which have moved relative competiveness among the various industry participants. We will partner with one of the industry participants to acquire competitors or otherwise be at the forefront of changing the dynamics of the industry to reposition the company for growth and/or profitable trading. Such repositioning might occur via any number of different strategies including an investment in new technology, acquiring a major supplier, merging with a competitor or re-engineering the supply chain to regain competitiveness.
Debt for Subsequent Ownership or Control
Helmsman can acquire debt in failing businesses as a strategy for achieving a financial restructure. Such an approach will often be an effective way to achieve control where the enterprise value of the business concerned has declined to a point which is less than the value of the obligations to the financial creditors concerned. This can avoid insolvency and the consequent loss of value that will often result.