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+61 (2) 9290 3330

enquiries@fsia.com.au

Investigation Services

Transaction Advisory Services

Purchasing assets from distressed companies presents some wonderful opportunities and also special challenges. Our team is experienced in conducting due diligence assignments and providing transaction advice for prospective purchasers of assets in the difficult and time sensitive environment of corporate workouts.

Our team has conducted many due diligence assignments on large corporates. Much of that experinece was gained during the Asian Financial Crisis with our assignments being conducted in the difficult environments of Indonesia, Vietnam and Singapore. One of our principals, Cliff Sanderson, established and led the Ernst & Young Transaction Advisory Services division in Indonesia and conducted assignments throughout Asia representing a wide variety of clients including private equity funds, distressed debt traders and trade purchasers.

Forensic

FSIA brings to its clients a wealth of multi-disciplinary expertise to assist in complex areas of disputes, investigations, risk management, recovery and analysis. FSIA principals headed up the Ernst & Young Fraud Team in Indonesia for 5 years leading projects of up to 10 people in fraud investigations.

Monitoring

If a company is “Underperforming” then a creditor can reasonably expect to be paid in full. However, an Underperforming company can quickly move down the insolvency slide. As a result, where a company is regarded as Underperforming, a creditor may be well advised to implement Monitoring of the debtor’s situation.

The primary objective of Monitoring is to provide comfort to a creditor that the actual cash inflows, cash outflows and financial performance of a debtor’s business are in accordance with pre-approved objectives and budgets.

FSIA always develops a Monitoring to the specific situation of the debtor. FSIA will typically conduct an initial review and thereafter attend the Company’s premises on a regular (usually monthly) basis and:

* review and verify month end cash balances by reference to bank statements, term deposit certificates and bank account reconciliations;
* review working capital levels for unusual items;
* examine material cash receipts and payments;
* select a sample of transactions to review to ensure that the transactions have been properly recorded and were in accordance with the approved budget;
* review the monthly trading performance;
* conduct a comparison of budgeted cashflow performance to actual cashflow performance and review any material deviations;
* conduct a high level review of any revised budgets prepared for coming periods;
* highlight any matters we discover which we consider may be of interest to our client.

Business Review Service

Our Business Review Service is normally undertaken to assess whether a business is a viable entity. That is, whether it has a commercial future. Usually this type of investigation is required by a lender who is considering whether it should continue to provide or extend support to a business and, if so, on what terms. Our Business Review Service seeks to ascertain the problems facing a business and to suggest possible solutions to them, or to review and comment on suggestions being put forward by the management of the business. The report also provides information and independent opinions to help the lender to determine its future policy to the borrower.

Our Business Review Service includes investigations on behalf of directors, banks, other creditors or lending or investing institutions and the preparation of security cover statements on behalf of the banks and other lenders.

The scope of our assignments vary depending on the client’s requirements and the borrower’s circumstances. Our review and report may therefore take the form of:

* a brief Independent Solvency Review (“quick and dirty”) covering the business and key financial data to determine whether further, more detailed work would be justified; or
* a detailed review and short report on the key issues and our recommendations; or
* a detailed review and full report on the whole operations, management and financial performance of the business.

Usually, the report we submit to the lender will be short and focused on the key findings and our recommendation.

FSIA has developed various tools and methodologies to assist in performing the Business Review Service. They include: a Management Effectiveness Methodology and Model Review Methodology.