Following the recent unfolding situation with ISG, FIS Associate Member and insolvency practitioner BABR has clarified what this means for affected businesses and provide guidance on what you should do next.
Understanding Administration
Administration is when a company is given legal protection from creditors while an appointed administrator attempts to rescue the business or achieve a better outcome for creditors than liquidation would provide. During this time, creditors generally cannot pursue claims against the company without court permission.
It’s important to note that in cases like this, immediate payments to creditors are rare, except in exceptional circumstances. Most creditors will need to wait for the administration process to be completed, which can take time. Therefore, it’s crucial to manage expectations regarding cash flow.
Likely next steps for affected members:
- Monitor developments: Monitor announcements regarding ISG’s situation closely. The outcome of administration could range from a restructuring and continuing business to liquidation.
- Review your position: Now is the time to carefully review your contracts, outstanding payments, and ongoing ISG projects. Since payments are likely to be delayed, you may need to adjust your cash flow planning accordingly.
- Prepare for delays: Be prepared for a lengthy process. The administration process can be slow, and in many cases, creditors receive only a fraction of what they are owed, if anything at all.
How to manage cash flow:
- Cash flow solutions: Given the likely delays, consider short-term financing or invoice financing to maintain liquidity.
- Renegotiations: Speak to other clients and suppliers to potentially renegotiate payment terms or request upfront payments to help cover any cash flow gaps.
- Seek professional advice: It may be beneficial to consult professionals such as insolvency practitioners, accountants, or legal advisers specialising in business restructuring and financial distress. They can guide your situation, help you explore your options, and protect your business.
We understand that these developments may cause concern, and we’re here to help support you through this period of uncertainty.
If you have any specific queries or require assistance with any financial issues related to ISG, please don’t hesitate to contact BABR directly on its dedicated helpline number, 03332 419 014, exclusively available to FIS Members.
To find out about BABR support available to FIS Members click here.