Save and prosper

With global competition increasing, UK manufacturers are under real pressure. According to

there are 2.4 million manufacturing companies in the UK generating approximately £385bn worth of gross output. This underlines the importance of giving real alternatives to those firms experiencing difficulties, other than being forced into insolvency.

Until recently, directors of struggling companies had only limited scope to facilitate the survival of their businesses. They could seek their creditors' approval for some formal recovery proposals, but such arrangements too often relied upon unrealistically optimistic future sales projections and did not address underlying problems.

Time and again such businesses re-hash and re-issue unrealistic business plans. While failure to deliver eventually loses all credibility for management, the practice is often used just to secure a small respite from insolvency.

Alternatively, businesses that appeared to be unable to address a self-managed turnaround, could ask their bank to appoint a receiver. This process sometimes helped preserve the firm's 'going concern' value but was often criticised for failing to take into account the position of ordinary creditors.