Avance

Royal Bank of Scotland

The Challenge

When a well-known licensed trade chain hit trading difficulties, Royal Bank of Scotland’s Specialised Lending Services (SLS) division instructed Avance to provide a comprehensive financial assessment and investigate the likelihood of success of a business rescue programme.

While it was acknowledged that the overall financial position of the licensed chain was poor, it contained many highly profitable units and its assets were deemed highly valuable. The complex business, which included bars, restaurants and hotels, required an expert approach to refinancing in order to avoid foreclosure and insolvency.

The Solution

Avance’s specialist licensed trade turnaround team was invited to spend time with the management team of the chain in financial difficulty, and assessed its entire business from corporate headquarters down to each outlet across the UK. The accounts were analysed, and management and financial reporting assessed to create a clear picture of the business in terms of financial strength, asset value and commercial prospects.

A commercial proposal was developed and supplied to SLS, and the proposing the opinion that the chain could be saved as a viable concern, providing significant steps were taken to reduce costs, improve reporting and cashflow.

The Result

Avance’s analysis persuaded SLS to take a view that the business should not face foreclosure on commercial loans, but rather be placed in a period of intensive care under close management by Avance.

Key assets were disposed of, putting millions of pounds back into the business and providing the financial platform needed to restructure it without missing a day’s trading. Crucially, goodwill value – which can account for up to 30 percent of the value of a licensed business – was rescued and most individual outlets were able to be saved, providing a positive impact on the local economy, and saving hundreds of jobs.