Refrigeration Engineering Company Suffered Decline In Market

The Challenge

A company from the refrigeration and air conditioning industry, trading successfully since 2006 with high-end clients, experienced a period of inconsistent trade and a decline in its sector. After a successful rebrand in 2012-2013 that saw turnover rise to £2.7m, the company decided to diversify. However, a major setback occurred in October 2013 when one of its largest debtors became insolvent, resulting in a loss of over £169,000. This was compounded by other bad debts, severely impacting the company’s financial stability and cash flow.

The Solution

The company conducted a review of the business and engaged RMT KSA to assist with a restructuring. The company had a strong vision and a solid business plan, which became the foundation of the rescue. During the financial forecasting process, it was determined that one of the company’s offices was unprofitable. The decision was made to close the office, which involved making a number of redundancies and removing one of the directors from the board. All redundancy costs were bound into a Company Voluntary Arrangement (CVA).

The Results

The CVA proposal was meticulously crafted and presented to the company’s creditors. The detailed plan and the director’s strong vision were key to its success. The CVA was accepted by creditors at the meeting, allowing the company to shed its unprofitable overheads and deal with the legacy debt. The successful restructuring stabilised the company and enabled it to move forward on a solid financial footing.