Project Example 31

Project Example – Strategic Planning

Assignment
  • Strategic plan for restructuring an investment company’s assets in order to reallocate assets to more attractive asset classes, and facilitate meeting debt obligations.
  • Alternative business models were developed with a focus on a real estate investment strategy
Client Name Kuwaiti listed investment company
Client’s Activities Direct investment, investment banking and asset management
Project Size Assets Size: ~USD 700 million
Assignment Date & Duration 2012, 5 months
Main Area of Focus Assist the client in developing a strategic plan with the aim of: i) optimally restructuring assets and liabilities in order to meet current financial obligations while allowing future growth, ii) evaluating new sources of revenues and different operating models, iii) revising the strategy to focus on real estate investments, iv) recommending optimal skills and staffing levels for the target organization structure, and v) recommend new grading and compensation schemes. The objective is to advice the Company on the optimal method of restructuring, which would assist in the progress towards its revised business strategy focusing on real estate investments as well as repayment of debt obligations.
Services Provided
  • Reviewed and assessed the company’s financial, liquidity and solvency position, its underlying assets/investments, and subsidiaries’ base and their composition.
  • Reviewed the company’s existing and adopted corporate debt restructuring plan and assessed its impact on the company’s existing strategic plan and business model.
  • Assessed the company’s strategic position within its sector and identified any gaps in its strategic plan, business model, and implementation action plan.
  • Reviewed and recommended alternative business strategies
    o Reviewed possibilities of improving the company’s investment activities/services by adding new activities
    o Reviewed the role and strategy for each subsidiary within the group to fit within the Parent’s revised strategic plan
    o Reviewed capabilities that could be provided by existing resources and capabilities that would have to be sourced separately.
  • Reviewed and assessed overall asset-liability management to ensure that timing of cash flows from assets investments/divestments fitted the company’s overall strategy and adjusted where required the company’s asset allocation.
  • Advised on company’s capital restructuring plan and provided guidance on writing-off losses, capitalizing premiums and reserves and reaching an efficient equity capital structure.
  • Recommended optimal skills and staffing levels to match target organization structure, including right-sizing and alternative skills and structure wherever applicable.
Outcome
  • Adjusted and developed the existing business strategy to match the revised focus towards real estate investments as well planned for adequate cash inflows to serve debt obligations.
  • Three detailed presentations were approved by the company’s management and a summary presentation was made to the board of directors which included:
    – External and internal analysis of the company’s situation, positioning and review of strategic plan
    – Second opinion on the strategy, business model and asset allocation
    – Human resources analysis and recommendations (including new organization structure and compensation scheme)
  • Recommendations were adopted and put to implementation.