Financial & Operational Support in Crisis Stabilisation
Profile
PE- owned Medical Equipment Manufacturing Group
Employees: 300
Turnover: £30m
Location: North England, UK
The Business Challenge
The group found itself at the beginning of the COVID-19 pandemic, in breach of a loan covenant due to the outstanding filing of the group’s consolidated accounts. Filing of consolidated accounts was dependent on delivery of audited accounts for all subsidiaries, including the UK. Following the discovery of fraudulent transactions within in the UK subsidiary, a forensic investigation had been launched and was required to complete prior sign off of audited accounts.
To further complicate matters, the UK subsidiary’s dormant UK parent company had been struck off by Companies House for non-fling of account. Therefore, reinstatement the parent company also became a necessary part of the filing and consolidation process.
Kelly Jones, Turnaround & Transformation Director Kelly’s Bio
How We Helped
Kingsgate was engaged as CRO in the UK subsidiary of a PE- owned, manufacturing group. The group is a component manufacturer for the global medical equipment supply chain, with 17 operating sites on 3 continents.
Appointed as CRO and member of the board of directors for the UK subsidiary, the engagement was to provide combined financial and operational support. This involved not only to oversee the integrity of the account preparation and audit sign- off process, but also to coordinate and ensure successful delivery of several inter- dependent workstreams in just nine weeks.
Focus and collaboration between various expert advisors was required to deliver one collective outcome. To do so involved a skilful approach to managing a large and complex stakeholder map.
Maintaining the balance of working constructively alongside of the incumbent directors to provide stability and a strong presence within the organisation, while at the same time acting as trusted advisor and providing oversight on behalf of the US group.
Results
The sign off of audited UK accounts, reinstatement of the dormant UK parent company and consolidation of the group’s accounts were all successfully completed before the expiry of the covenant waiver restoring stability for the group.
Alongside of successful delivery of the milestones, the root causes of the financial and operational risks were identified. These included a wide range of areas involving local leadership, governance, and internal controls.
The activities required to affect foundational change were incorporated into a roadmap, that once completed would ensure a sustainable and resilient future for the organisation.
