How to align stakeholder interests on capital and debt restructure

In normal circumstances, most of the key stakeholders in a business share a common aim: the continuing good performance of the company. Their ultimate end goals may differ - your bank may be focussed on repayment of its debt, whereas your employees may be more concerned with job security – but, by and large, there’s alignment.

This alignment can break, however, if your business has become burdened with too much debt or the wrong capital structure. Without alignment, some stakeholders can take decisions that may be in their own best interests but that are not in the company’s.

The risks of losing stakeholder alignment over debt

When it becomes clear that your business has too much debt, or that it will take a huge amount of time to repay loans, one of the key risks is that the management team will not be fully incentivised to drive the business forward. Even if they are emotionally involved in the business, they may face the prospect of making significant amounts of money for other people - and not feeling as if they will benefit as well.

This is where a capital and debt restructure can help, aligning all of your stakeholders’ interests so that everybody is motivated to keep supporting the business and see it not just survive, but thrive.

How we can help align stakeholder interests

During any restructure, your directors and management teams will remain focused on managing and driving the business forward day to day.

Our role as your restructuring advisors is to project manage the process from start to finish, with the first step being to understand your stakeholders’:

  1. Identities.
  2. Relevant positions.
  3. Motivations and expectations, potentially even individuals’ requirements.

With offices all over the UK and a wide network of contacts, it is likely that we will know many of your stakeholders already - particularly those key people at financial institutions. This means we’re well placed to fully understand their positions and what may be achievable in a restructure. 

Contact us

Our Restructuring Advisory team have a wealth of experience in helping stakeholders re-align during concerns over debt and capital structure. Please do not hesitate to get in touch with Gareth or Damian to find out more.