PwC poll sees further restructuring in 2012

This year is set to see further widespread restructuring efforts at companies, including staff numbers, consolidation of business divisions, and debt refinancing.

A new study by professional services company PricewaterhouseCoopers (PwC) has found that 70% of companies are planning further restructuring activities this year; with 87% of those surveyed saying their business has become more viable since undergoing recent restructuring programmes.

“While much of the restructuring, to date, has been operational in nature, the funding side of the business is coming more and more into focus as businesses strive for stabilisation,” according to Brian Bergin, restructuring partner at PwC.

He added: “The key challenge for successful restructuring is achieving team buy-in. There is no doubt that excellent people-engagement is critical for successful restructuring and for the benefits to be sustainable.”

The survey shows that companies are viewing overhead reduction as a clear benefit; with stabilisation of the funding structure, margin improvement and improved staff productivity also vital.

This year, many companies are looking to restructure their debt refinancing, consolidate business divisions and rationalise head count.

The single key barrier to successful restructuring, according to respondents, is people buy-in, with available funding and bank/lender engagement also problematic.

PwC’s restructuring and insolvency director, Declan McDonald added: “We’re seeing more companies seeking to restructure their debt and balance sheets. In many cases, corporate debt has become unsustainable and, hence, the requirement to restructure.

“To do this, any business should ensure that it is in good shape, operationally, prior to looking for any debt restructuring agreement with its lenders and prepare a realistic plan demonstrating the future viability and debt capacity of the business.”