London Based Conference Organiser Sales Fell Due to 9/11

The Challenge

An award-winning, highly profitable London based conference organiser business with £6m in sales and 30 staff suffered a massive market downturn due to the 9/11 travel slump, which caused sales to fall by 50% almost overnight. The management team reacted too late, and the company was left with a significant debt burden. Compounding the issue was the impending lease expiration on its main premises, which would trigger substantial dilapidations costs.

The Solution

RMT KSA was brought in to implement a Company Voluntary Arrangement (CVA) to restructure the company’s balance sheet and freeze approximately £1.25m of accumulated debt. The founders provided a modest investment to help stabilise the business. RMT KSA assisted in a comprehensive restructuring effort, including making around 25 people redundant, reducing costs, and restarting marketing efforts. New management was introduced to support the founder directors, who were struggling with the stress of downsizing, relocating, and continuous firefighting.

The Results

The CVA successfully restructured the company’s debt, preventing the “liquidation meltdown of assets.” The company was subsequently sold to a management buyout team that had the necessary capital to rebuild the business. The CVA supervisor was able to convert the company’s modest assets into cash, which will be used to pay a dividend to creditors, providing a better outcome for them than they would have received in a liquidation.