Case Study: Navigating equity restructuring for a European manufacturer
At A Glance
Client Industry: Consumer Products Manufacturing
Regions Served: Shenzhen, Europe (cross-border coordination)
Client Overview: A European-based manufacturer of infant and toddler products with production operations in Shenzhen, China. The client operates through a China subsidiary and engages in frequent cross-border transactions with affiliated entities.
Client Brief
- Finance function handled by an overseas affiliate, resulting in concerns over reporting quality, controls and compliance
- Management reporting focused heavily on revenue and profitability, with limited visibility over balance sheet health and cash flow
- Cash flow constraints despite significant reported profits
- Large volume of unreconciled intercompany transactions with European affiliates
- Difficulty determining a fair equity valuation for a shareholder exit
- Need for employee incentive planning through equity restructuring
How We Helped
- Reviewed financial statements, focusing on balance sheet integrity and key account reconciliations
- Redesigned management reporting with CFO-level review checklists and enhanced balance sheet controls
- Proposed adjusting entries to correct inaccuracies and improve net asset value
- Coordinated intercompany reconciliation with European affiliates and isolated related-party transaction impacts
- Advised on shareholder exit structuring aligned with existing shareholder arrangements
- Conducted regular stakeholder review sessions and consolidated key findings and recommendations
Our Value
- Increased stakeholder trust and consolidated key findings and recommendations
- Isolated the impact of former shareholders’ affiliates through a clearly structured exit arrangement
- Adjusted net assets accepted as the basis for shareholder valuation and exit discussions
- Enhanced management reporting with strengthened cash flow monitoring and balance sheet oversight
- Improved alignment between China operations and global stakeholders