Commercial Technology Supplier

Complex balance sheet issues can place otherwise viable businesses under extreme pressure, particularly when liabilities arise from related-party structures and cross-guarantee exposures.

This case study explores how an electrical contracting company faced the threat of insolvency after becoming exposed to substantial cross-guarantee claims linked to the collapse of a related entity.

The related entity had incurred significant losses before ultimately being wound up, triggering potential claims against the electrical contracting business under existing cross-guarantee arrangements.

Although the underlying contracting business remained operationally viable, the scale and complexity of the exposure created significant financial and stakeholder pressure, requiring an urgent and highly coordinated restructuring process.

Compounding the situation:

• The directors were under considerable stress due to the complexity and implications of the restructure

• The process needed to commence immediately prior to Christmas, creating uncertainty for staff, suppliers, customers, and financiers

• Multiple stakeholders, lenders, and creditors required coordinated engagement within a compressed timeframe

• Vantage Performance was engaged to develop and execute a strategy to restructure the balance sheet utilising the voluntary administration process while preserving the long-term viability of the business.

Key initiatives included:

• Development of a high-level balance sheet restructuring strategy designed to restore business viability

• Preparation of a comprehensive briefing pack for the appointed administrator to streamline the administration process and minimise disruption

• Formulation and negotiation of a Deed of Company Arrangement (DOCA) proposal

• Structuring of a complex associated creditors’ trust incorporating a 25-tier distribution waterfall

• Negotiation of a 90% reduction in the cross-guarantee creditor claim

• Project management of the refinance of ANZ banking facilities

• Ongoing communication and stakeholder management across creditors, employees, suppliers, customers, and financiers

A key priority throughout the engagement was minimising uncertainty and preserving operational continuity while executing a highly technical restructuring process under significant time pressure.

The administration process was successfully completed within 25 days.

The outcome:

• Successful restructuring of the company’s balance sheet and creditor obligations

• Preservation of the underlying operating business

• Significant reduction in cross-guarantee liability exposure

• Successful refinance of secured banking arrangements

• Restoration of stakeholder confidence and operational stability

• Implementation of stronger governance and accountability frameworks

• Ongoing improvement in business profitability and strategic alignment

Following the successful restructure, Vantage Performance continued to advise the business as it transitioned into a more disciplined and strategically aligned operating model.

The result wasn’t simply the completion of a restructuring process, it was the restoration of long-term business viability through strategic execution, governance improvement, and stakeholder alignment.

This is where Vantage Performance operates: helping businesses navigate complex restructures, financial pressure, and critical stakeholder events with disciplined leadership and execution.

Learn more: vantageperformance.com.au

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