Transport Company

Transport Company

Problem

The client owned two struggling businesses – one in trucking, the other a co-owned farming venture. Neither business was sufficiently profitable. The co-owned farm was located in another state. There were concerns as to misappropriation in the trucking business, and the collection policies were inadequate – customers were not paying. The assets in one business had been used to guarantee loans for the other. The client needed a strategy to turnaround, or dispose of one or both businesses.

Solution

Bryant & Bryant analysed both businesses, and identified that whilst the transport business was suffering significant solvency issues, a restructuring and asset sale would allow it to become profitable.

The farm had previously been highly valued. However, its high amortisation costs and low profitability, a significant, unresolved conflict between the co-owners, and physical remoteness all conspired against our client’s ability to keep a close eye on this business.

We determined that it was not possible for the client to maintain both businesses, and assisted the client to sell their share of the farm and concentrate all future efforts on improving the transport business.

Outcome

We brokered a sale of the client’s stake in the farm to the co-owner, and unwound the cross-guarantees between the two businesses. The client now has a smaller but more easily managed and profitable transport business We continue to advise him on business structure, wealth management and financing.

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