This motor dealership franchise had been operating at a loss for some time. Physical reorganisation and site rebuild (dictated by the manufacturer) coincided with the Managing Director’s ill health and these factors combined to worsen the financial situation.
With bank borrowing increasing, an alternative strategy was needed. The company appointed Playfair Partnerships to give advice and take action to reduce financial losses and improve cash.
Playfair Partnerships led a review of the options available to the shareholders, ranging from business continuity to exiting. This review was completed without reliable accounting information and depended on Playfair Partnerships’ forecasting experience to produce accurate estimates.
It became apparent that there was an uncertain future in continuing the business and little appetite to do so. Consequently, the Playfair team devised a complex and imaginative plan, in which the properties and business were each sold separately to different parties, avoiding significant liabilities and maximising asset realisation. This ultimately would allow the shareholders to exit the business with a sizeable financial gain.
John Playfair helped negotiate the sale of the business by addressing the concerns of all the parties. The sale of the trade meant redundancy and closure costs were avoided. The sale of the property was a highly successful deal because of the care taken with the negotiations between the vendor, the trade buyer and the property buyer.
The business continued under new ownership, and with the benefit of a high realisation of assets for the vendor. Staff numbers remained high, and the shareholders enjoyed significant financial gain from the combined deals.
“Playfair Partnerships acted as the ideal catalyst to promote the dramatic changes to a lifetime business. The reports produced provided extremely useful analysis of our options and quantified the gains and losses of various strategies. We quickly developed an excellent working relationship with John, who demonstrated great empathy, support and respect for our business, acting as observer and adviser at all the numerous meetings to steer us to what was originally believed to be an unattainable successful conclusion.” – Managing Director and Shareholder
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