Project Pacific

Whiteboard

Two financially challenged colleges worked with De Novo Advisory to create a successful application to the TU, securing restructuring funds to support the merger, and also retaining Bank support. De Novo’s constructive challenge and advice enabled management to make sound decisions around forward commitments, and gave clarity for the future direction for the merged entity.

Summary

  • Proposed merger of two GFE colleges
  • Colleges were complying with area based review recommendations
  • Substantial debt burdens relative to combined forward size
  • Both affected by funding cuts and sector reforms
  • Efficiency opportunities to be leveraged

Challenges:

  • Legacy debt; forward deficits
  • Excess space, but geographically challenged due to travel to learn patterns
  • Operational inefficiencies
  • Management and governance required strengthening
  • Pace in embracing the need for change
  • Substantial restructuring support needed to secure viable, sustainable merged entity
  • Lack of skills/ knowledge in dealing with lender / funder expectations

How we helped:

  • Facilitated financial discussions with ESFA, TU and Bank
  • Helped build confidence in the future entity
  • Supported and guided Management
  • Integrated with project manager responsible for strategic business plan
  • Provided constructive challenge of strategic plan, forecasts & key assumptions
  • Modelled the level and shape of support needed from TU, based on CFADS model
  • Engaged with TU and Bank re the structure of that support
  • Modelled repayment profile for TU loan
  • Explored potential alternative refinancing opportunities
  • Provided support pre / post Financial DD process
  • Input into key sections of application form to TU

Results:

  • Successful TU application
  • Banking position secured
  • Merger completed
  • Robust business plan
  • Increased stakeholder confidence
  • Security of provision for learners in area

Benefits at a glance:

  • Clear, credible business plan and TU application secured funding
  • Bank support retained
  • Colleges received clear, timely and practical advice
  • Constructive challenge aided delivery of a robust plan
  • Support and guidance enabled management to make sound decisions
  • Stakeholder management, and expertise of dealing with funders in distressed scenarios

 

 

Thanks to guests from the Midlands turnaround & restructuring community for lively debate at IFT’s Corporate Partn… https://t.co/Oa1bEfqswq