Independent Business Reviews
We work with FLenders, Investors and Venture Capitalists to carry out an independent Business Reviews (IBR) of businesses at two levels:
- New Businesses that they are considering advancing credit but require an independent 3rd party’s opinion
- Existing clients within their portfolio who are experiencing signs of financial distress and more often than not have made requests for additional funding
The IBR helps both the customer and the Lender/Investor/Venture Capitalist to understand the business better, including the root cause of (any) current distress to facilitate decision making. Through this evaluation, the Lender/Investor/Venture Capitalist understands the commercial viability of an enterprise (or otherwise) and implements a financing structure that suits the realities of the underlying business. In many instances, such engagements require injection of equity to shore up the business capitalization.
This service requires buy-in from the client in order to provide sufficient information and co-operation to enable an outsider’s view of the business to identify the key structural or operational challenges as well as solutions to the challenges. The outcome of the IBR must also be beneficial to the client.
In a typical IBR, we would, inter alia, include the assessment of:-
- Current trading and financial position
- Profit and cashflow projections
- Business and financial strategies
- Sensitivity analysis
- Management and systems
- Lender/Investor/Venture Capitalist security cover
- The way forward for the business
Highlight of some recent Engagements
Centerprise Africa was retained by a Financial Institution (FI) to evaluate the viability of continuing to finance an enterprise in the Agricultural Sector. The FI was concerned by continued requests for additional facilities which were not being repaid.
Centerprise was tasked to advise the FI whether:
- To continue funding the enterprise if there was sufficient evidence of commercial viability
- To foreclose on the enterprise
The Centerprise Team reviewed the enterprise and made recommendations which helped the FI to manage its exit from the facility in a structured manner.
The Centerprise Team advised that:
- The FI continues to support the enterprise through controlled working capital
- The Enterprise to identify a partner to inject equity into the business
- The enterprise to self-off its non-core business which was draining cashflows
- The enterprise to carry out an operational rationalization programme that included reducing its bloated staff compliment
Centerprise worked with the Enterprise and identified an investor who invested acquired a significant stake in the enterprise and the Bank was repaid its outstanding debt by the new company.