An Australian subsidiary of a Chinese-owned group required an independent diagnostic review to consider their current financial status and options for the Company.
The purpose of this review was to allow all parties to get a complete understanding of the subsidiary’s current financial position, but also to identify the different options available, and the implications of each course of action on the Company and its stakeholders.
In addition, there was a need for our team to communicate and deliver our findings in both English and Mandarin.
Grant Thornton was engaged by the business to prepare this high-level diagnostic options review for the directors.
The scope included consideration of financial, legal and strategic elements, as well outcomes that included both going concern and formal administration outcomes.
The team at Grant Thornton – led by the firm’s restructuring and turnaround experts – took a whole-of-business approach to the analysis, bringing together our financial and turnaround expertise, alongside our Chinese practice.
Identifying innovative solutions, and maximising value in the circumstances was the focus. Our recommendations also accounted for crucial non-financial factors for success, including cultural sensitivities, translation to Mandarin, and identifying and managing potential reputational issues for the Chinese directors.
The Chinese-based owner decided to pursue one of the options identified by Grant Thornton.
The solution helped protect the reputation of the locally based Chinese directors, and mitigated a large financial loss, with value preserved in the broader group and residual funds made available to reinvest or repatriate to the parent.
“An innovative solution must go further than the numbers alone. Our approach considers both the financial and non-financial elements, whilst balancing the cultural, reputational and community expectations of a Company’s locally based Chinese directors and stakeholders.” - Matt Byrnes
Matt Byrnes is Grant Thornton’s National Head of Asia Strategy. He has particular expertise in assisting businesses in the manufacturing, real estate and construction, transport and hotel/accommodation industries.
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