In times of uncertainty, stakeholders may require an independent review on the financial health and outlook of a company. This may include:
- Shareholders who want to understand recent and forecast business performance to develop strategic options with regards to their position, as well as understand potential opportunities for growth and value creation.
- Management who want to inform grow, fix, sell and close decisions with regards to specific divisions, geographies and entities.
- Business partners who want to understand the financial resilience and risks associated with key counterparties such as major customers, suppliers, distributors or alliance partners ahead of signing or renewing significant contracts.
- Creditors who want to obtain an in-depth understanding of the borrower’s debt service ability, the risks to their exposure and the options available for a resolution considering the interests of all parties.
KPMG in Vietnam and Cambodia provides a full spectrum of independent business review, financial health check, corporate financial advisory and monitoring services to assess a company’s financial resilience, their ability to meet financial obligations and available options to protect stakeholder exposure.
Our services cover:
- Review of historical financials, including ratio analysis, trend analysis and comparison versus forecasts and peers.
- Review of financial projections, including sensitivity and scenario analysis on profitability, liquidity, cash flow, debt service ability and sustainable debt levels.
- Identification of key financial risks and advice to mitigate these and protect stakeholder value.
- Ongoing performance monitoring and reporting.
- Our client was a lender with exposure to a mobile power plants company operating across a range of emerging markets.
- The company had experienced significant slowdowns in customer receipts and delays in major projects, causing financial distress. The lender wanted to understand the current financial situation and historical financial performance of the company.
- Additionally, the lender wanted to understand the basis of preparation for Management’s business plans and the reasonableness of assumptions used.
- KPMG conducted an independent business review of the company’s performance. We reviewed the company’s short-term cash flow forecast, historical and forecast financial performance and the long-term business plan.
- We conducted scenario analysis and sensitivity analysis to understand the risks to the forecasts and present the outcomes for the lender under a range of scenarios.
- We provided the lender with an options assessment with ways to protect its exposure.
- Our independent business review and options assessment provided the lender with a clear view of the borrower’s recent financial performance, current financial position, liquidity forecasts and commercial market outlook.
- Through this assessment, the lender obtained a robust overview of all the facts and the impact on their exposure of various scenarios that could crystalize.
- The lender used these insights to inform their decision-making process and negotiations with the company. KPMG supported the lender throughout the entire negotiation process.