Background

FRP were engaged by a large financial institution in circumstances where one of its business critical suppliers was experiencing financial distress. The suppliers had been impacted by deteriorating margins and a cyber-attack, having already received one round of emergency funding from its customer group.

The scope of the engagement was to assist with negotiations with the various stakeholders involved and begin contingency planning for supplier failure and the mitigation of any negative impact.

Action

FRP proactively engaged with the supplier’s legal and financial advisers to understand its financial position, the available options and what steps had been taken to ensure continuity of supply. Whilst no option was without risk, we were able to advise on potential strategies that minimised any emergency funding that would need to be provided whilst maximising the prospects of continuity of supply. At all times there was extensive engagement with all stakeholders and their respective adviser teams.

FRP were able to review the proposed transactions in respect of the supplier, which were complex given the dynamics of the group to which it belonged. Potential risks and costs were assessed so that our client could make a fully informed commercial decision.

Outcome

The client was able to successfully mitigate any impact of disruption to supply by implementing our contingency plan, avoiding major financial losses and the saving of millions.