AlixPartners Turnaround and Transformation Survey (2023)

CAN MIDDLE-MARKET FIRMS WITHSTAND A CAPITAL CRUNCH?: Insights from the AlixPartners 18th Annual Turnaround and Transformation Survey

For distressed middle-market companies seeking

to refinance in a capital crunch, critical foundation

disciplines assume renewed importance. The best

way to address the growing uncertainty and neverending disruption is a return

to "no regret" moves that

propel the business forward. Open dialogue and wellreasoned

requests to lenders help demonstrate the

soundness of a business and its management; too many

boardrooms assume that what is obvious to them will

be obvious to others. And, as ever, it pays to get ahead

of potential problems and be open minded; in the current

environment, capital solutions are more complicated and

will likely take more time to implement compared to when

interest rates were lower.

Above all, those hoping to buy time through an amend

and extend exercise need a clear idea of what they

are buying time for. Pushing out debt maturity may be

appropriate to take a company to a major corporate

event (such as a sale or equity injection) or alongside

an operational transformation to address underlying

structural problems, which is easier said than done.

At a time when clarity and certainty are at a premium

for business leaders, success in this respect involves

building a bridge, not a pier.

DOUBLE DOWN ON CRITICAL

BUT COMPLEX REFINANCING

AND OPERATIONAL PLANS

JESSICA

CLAYTON

Partner & Managing

Director, London

Pushing out debt maturity may be appropriate

to take a company to a major corporate event

or alongside an operational transformation to

address underlying structural problems, which

is easier said than done. At a time where clarity

and certainty are at a premium for business

leaders, success in this respect involves

building a bridge, not a pier.

Open dialogue and well-reasoned requests to lenders help demonstrate the soundness of a

business and its management; what may be obvious in the boardroom isn't necessarily obvious

to others. As ever, it pays to get ahead of potential problems; in the current high interest rate

environment, capital solutions are more complicated and will take more time to implement.

LEE

WATSON

Partner & Managing

Director, London