Harbour Masters - safe harbour & restructuring blog

Welcome to Harbour Masters, where we offer insights and updates on the expertise and guidance available for the Directors of companies in need of advice in the face of stiff trade winds. Our updates focus on the critical business topics of restructuring, turnaround, and the availability of the new 'Safe Harbour' provisions, all designed to help companies renew, restructure, and rebuild. 

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A potential lifeline for retail in the New Year?

07-Feb-2018 11:24:35 / by Peter Krejci

Sydney-based Principal Peter Krejci contributed an article in the February 2018 edition of the Governance Institute's membership magazine, 'Governance Directions', published last week. 

An excerpt follows:

"Oroton entering voluntary administration (VA) in early December 2017; intense media coverage of Amazon’s launch in Australia and itspredicted impact on local retailers; media reports of major retailer Myer’s poor Christmas sales; a forecast drop in consumer spending due to softening house prices; these all point to troubled waters ahead for retailers leading into 2018.

As well as these strong concerns for the sector, the recent sale of the international operations of Westfield by the Lowy family to a European firm is also an indication of an outlook
for the retail sector in the New Year.

Retail market conditions can be a challenge even at the best of times; they continue to be so, owing to the structural changes faced by the sector from online retail and related services.

Many industry observers and pundits predict that a number of retailers will experience financial distress brought about by the rapidly changing retail market conditions moving into 2018 and beyond. While a number of market participants will adapt, it is forecast that many others will either close or be forced into VA, as was the experience in several major cases in the US after Amazon formally launched there.

Faced with this distress, some businesses will have a balance sheet sufficient to fund trading losses in the short term, however destruction of shareholder value is never received well unless there is a strategic plan to stem the losses and bring the business back to viability, that is, via restructuring or turn around management.

 

Safe harbour: A refuge for retailers?

In this environment retailers may be able to avail themselves of recently introduced Safe Harbour laws in formulating a strategic turnaround plan for the business, while at the same time affording the board of directors protection from an insolvent trading liability, should the turnaround plan not come to pass."

 

Read the complete article here:

BRI_Harbour Masters_Governance Directions_Feb18

 

For more information, contact Peter directly on +61 (0)2 8263 2300, or email: pkrejci@brifnsw.com.au

 

Topics: Retail, Plan, Better Outcome, Directors, Turnaround, Restructuring, Amazon, Safe Harbour

Peter Krejci

Written by Peter Krejci

Peter is a registered and official liquidator and a founding principal of BRI Ferrier with over 20 years' experience in corporate recovery and turnaround management. He has extensive experience advising secured creditors and boards of directors on options available to them in dealing with companies in financial distress. While primarily working with medium-sized corporates, Peter's experience extends to organisations of all sizes including public and private companies and government entities.