Project EPC

Pre-pack Administration


by Franklyn Ofonagoro

Preparing a Key Stakeholder Plan

Background

We were introduced by the corporate parent of an Engineering, Procurement and Construction (“EPC”) to help support an accelerated sale via a pre-pack of their UK subsidiary that was on the verge of failure. An uncontrolled insolvency would have led to material dissipation of value for the shareholder and the subsidiary’s stakeholders.

Issue

The subsidiary’s board had a number of key stakeholders including; shareholders, the UK Pension Regulator, employees, key customers (with ongoing contracts), key suppliers, benefit scheme pension trustees and performance and surety bond providers - each with differing objectives and a variety of likely responses to an announcement of a planned pre-pack rescue of the business.

The success or failure of the rescue relied heavily on the ability of the subsidiary’s board to pro-actively interact with and manage these stakeholders, in order to ensure their ongoing support and cooperation for the rescue strategy.

Outcome

We worked together with the subsidiary’s board to prepare a key stakeholder plan which mapped out bespoke communications tailored to each stakeholder which included, amongst other information; financial exposure should a rescue not be achieved, primary objectives, PR sensitivities, key information to be conveyed and key decision making. We also worked on contingency plans for each key stakeholder in the event of unexpected responses or counter proposals.

A timetable was devised outlining the sequence and timelines within which key information and updates had to be delivered to the stakeholders and we insured rapid implementation of the strategy.
 After months of hard work and engagement with all of the key stakeholders, the subsidiary was successfully sold via a pre-pack administration, with the preservation of the business; updated customer contracts and over 100 jobs. 

This process led to a significantly better outcome than would otherwise have been the case had the board of directors left it late in the day to seek support with managing the subsidiary’s key stakeholders.

 


Specialisms