Recession
Majority of Irish businesses planning to continue restructuring in the year ahead
By PriceWaterhouseCoopers Ireland
Feb 2, 2010 - 7:21:31 AM

Two-thirds of Irish business planning to continue restructuring - new PwC poll with the Dublin Chamber of Commerce reveals

A poll carried out by PwC with the Dublin Chamber of Commerce revealed that business restructuring continues to be a significant challenge for nearly two-thirds (64%) of Irish businesses. According to the poll, over three quarters (78%) of participants said that they had undertaken operational or financial restructuring in the last 12 months. In addition, nearly two-thirds (64%) are planning to take further action in the year ahead.

According to the poll, the key financial restructuring measures being planned in the year ahead are renegotiating existing bank facilities (42%); extending or rescheduling capital repayments (36%); restructuring of bank borrowings (27%) and raising new capital (24%).

The lack of available finance from financial institutions was reported to be the single most significant barrier to restructuring - according to over half (53%) of survey participants. Other barriers noted were difficulties in generating cash internally (38%); increased security levels required 22% and bank amendment fees and charges (22%).

Speaking about the poll's results, Brian Bergin, Partner, Business Restructuring, PwC said:
"The poll confirms that businesses continue to tackle the challenges presented by the economic downturn in order to position themselves for the upturn.

Many businesses are currently facing restructuring challenges whether this is to improve operational effectiveness or to restructure their funding positions. In many cases the first wave of operational restructuring has taken place and businesses are now looking even deeper to identify how to generate further value in such areas as supply chain management, route to market and organisational effectiveness. The success of these larger scale projects relies on the quality of information used in making key decisions and an effective execution which recognises the need to collaborate with the people impacted and obtain their support going forward. From a financial perspective the ability to reach an agreement with your lenders will be underpinned by the strength of the relationship and the level of trust between the parties. It is therefore important in the current environment to maintain frequent, direct and candid communications with your lenders."

Gina Quin, Chief Executive, Dublin Chamber of Commerce commented:
"This poll demonstrates that cash-flow management problems remain a serious challenges for many businesses. We've been working with Government, including through its Credit Supply Clearing Group, to come up with solutions. Measures to improve liquidity coupled with effective business restructuring will ensure that Irish business can be sustainable into the future."

Brian Bergin concluded:
"Restructuring will go a long way towards restoring Ireland's national competitiveness. We can expect Irish businesses who act decisively to emerge fit for the future and well positioned to seize the growth opportunities that will present themselves."

About PricewaterhouseCoopers
PricewaterhouseCoopers (www.pwc.com/ie) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. For more information about PricewaterhouseCoopers, please visit www.pwc.com/ie.