Brownstone IT

Turnaround and Investment - Moregate acquired a significant stake in BrownstoneIT Ltd, a leading satellite services provider, with the view to turning around the operation, change the business model and take the management expertise to the next level.

Brownstone IT

We had four key objectives common to most turnarounds:

Take control and manage the immediate crisis

Due to inadequate financial controls and poor working capital management the business suffered serious pressure from creditors, banks and other stakeholders. If not managed the business would have been fatally wounded. Our consultants introduced working capital management tools and processes to manage cash flow, profit and loss and balance sheet forecasts. This allowed management to deal with creditors, debtors and banks to manage the cash balance. At management level we had to improve leadership expertise and start laying the foundations for the change. We asked our partners at P5 Management to take the existing management through a series of coaching sessions.

Rebuild stakeholder support

Stakeholder management became the key focus after the stabilisation. Only then could we start and re-engage suppliers and partners with the view to devise a new business model.

Fixing the business
Strategic focus and devising a changed business model was the key challenge going forward as the existing management was given no time to relax and revert to the old way of doing business. Early, simple measures as offering lease finance, identifying niche solutions and new pricing structures moved towards a fundamental change of the business model.

Resolve future funding
A new financial structure was put to investors and banks. Moregate was able to secure current funds, raise new bank debt and invest itself. The company now has sufficient working capital headroom and additional funds to invest to transition to the new business model.

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