Finance Monthly - April 2023

Finance Monthly. Bus i ne s s & Economy 55 the Landwood Group offering and strict area of expertise in the right circumstances securing funding can provide the temporary lifeline a business needs to survive for the long term. What are the challenges you face when attempting to appraise and value the assets of businesses that have gone into liquidation? What challenges present themselves when a company has overseas or offshore assets? Appraising and valuing distressed business assets, whether in liquidation, administration or receivership can be challenging. Gaining access to the site can be problematic and depends on the directors and or the landlord cooperating. Access to MI systems and documentary evidence for the assets, stock and property is very important when gathering data for valuations, but this can also be hard to obtain if the owners and directors of the business don’t cooperate or have already walked away. Valuing the goodwill, intellectual property and other intangible assets requires detailed information to support them. Again these can also be challenging to obtain in a distressed situation. In essence, it is not unusual to have little - if any - information and help, meaning that we have to reconstruct and retrofit as much information as possible. This can have an adverse impact on valuations, for all the obvious reasons. Asset and stock values will need to be on an ex-situ (or break up) basis, which is typically a heavily discounted value that reflects the potential sale realisations of the assets on the second-hand market. This can be most extreme when selling distressed stock which can often be valued as low as 10p in the £1. This reflects the often significant cost of removal, storage and sale of the stock. Finally, overseas or offshore assets are not as common an issue, but where they exist they will be subject to the local jurisdiction and laws governing insolvency. The remote (from the UK) location of these assets also presents a challenge for physical inspection of the site and assets. You are a full-service firm, which includes selling assets and property portfolios. What impact is the current economic environment having on the sale and disposal of assets? The market for distressed assets usually remains resilient with experienced buyers ready and willing to act at short notice. Buyers of machinery and business assets tend to be savvy and well aware of the opportunities to be had in this environment. Both trader and enduser buyers are still prepared to buy if the deals are good enough. However, traditional buyers of residential properties (owneroccupiers) are more cautious and lenders even more so, restricting their lending criteria even if they maintain their headline rates and messaging about the availability of mortgages. Cash is king in these circumstances. Commercial property sale volumes have already slowed down and values have dropped across the UK. However, deals continue to happen albeit the practice of “price chipping” has returned with buyers seeking to take advantage of the position in the market. Website: Phone: 0161 710 2010 Email:

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