RESTRUCTURING ADVISER URGENTLY CALLS FOR STRUGGLING BUSINESSES TO SEEK HELP BEFORE JOBKEEPER ENDS

When Job Keeper ends on 28 March, many businesses, especially those associated with  travel and tourism, may find themselves financially struggling to meet their financial commitments. Leading restructuring adviser Mackay Goodwin is urging all businesses in crisis to seek help before the 28 March deadline, but also calls for the government to make special consideration for industries unable to resume normal business operations (travel, tourism and associated sectors), especially in light of the recently announced delay in opening international borders.

8 March, 2021

For Immediate Release 

One of Australia's leading restructuring advisers, Mackay Goodwin, is urging financially troubled businesses to urgently seek professional financial assistance before the Government winds back JobKeeper payments at the end of this month (28 March).

It is also asking the Government for special consideration for the pandemic's most impacted industries, which are yet to see an upswing in their business - industries such as Travel and Tourism, Hospitality and Events, to name just a few. Travel and tourism, especially, will be further impacted by the Government’s recent announcement that it will delay opening international borders.

Mackay Goodwin CEO Domenic Calabretta explains: "Unfortunately, some industries are still unable to return to business as usual after having their entire sector virtually wiped out by COVID-19. Other businesses, which may be on the path to recovery, will still need professional help once the Government rolls back its JobKeeper lifeline on 28 March." 

"I urge the Government to find a solution for the most vulnerable industries which still can't pick up their day-to-day operations due to ongoing restrictions. These industry sectors must be considered and treated separately to other industries," he continues. 

"Affected companies will need at least four weeks to cover redundancy provisions for staff unless a solution or extension to JobKeeper is delivered, and many companies may fall at that hurdle. They must seek help now before the 28 March deadline," he says.

Mackay Goodwin is advising one prominent travel business which has recently gone into voluntary administration. Mr Calabretta fears it is only one of many companies in vulnerable industry sectors that will find themselves in a similar situation by the end of next month.

"There are options available to struggling businesses if they act early and as soon as possible," he says. "If a financial adviser specialising in business restructuring is supporting them, there's a chance businesses may be able to manage their way out of their financial woes and not have to close their doors," he says.  

"The first step is for businesses to understand their financial position thoroughly. They should also contact a small business restructuring adviser who can assess their situation with them in the first instance."

There are several options available to affected businesses, including voluntary administration or a small business restructure. 

Calabretta explains: "At the beginning of this year, the Government introduced a new small business restructuring process that keeps the business management team in control of operations. It keeps restructuring costs low and takes advantage of having a small business restructuring practitioner on-hand to oversee the strategy and restructure of the business to manage debt repayment options."

"Having the peace of mind that the small business restructuring expertise is there allows company directors and managers to focus on rebuilding the company and delivering an ongoing growth strategy," he says.

To be eligible for the new process, companies must meet the criteria. They must be incorporated, which is have an ACN. Their debts need to be less than a million dollars, and they must be at risk of trading insolvent.

However, where they don't fit that specific criterion, other options are available, which a financial adviser can take them through. 

Calabretta concludes: "Impacted companies should seek help now, and not wait until JobKeeper dries up. Employee entitlements such as redundancies will need to be covered where a business may need to liquidate, so seeking help should give companies the peace of mind that an experienced financial adviser is supporting them.”

Mackay Goodwin has a comprehensive free business health check available to all businesses on its website at https://www.mackaygoodwin.com.au/insights/will-business-health-check-change-direction-business/

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 About Mackay Goodwin: Founded by CEO Domenic Calabretta, Mackay Goodwin is one of Australia’s leading insolvency and restructure businesses and has carved a niche successfully working with stakeholders in distressed businesses. The company handles everything from complex restructures and recoveries for listed companies and on behalf of various financial institutions to advising SMEs and finding the most appropriate business solution that works for all parties.

For further information or to arrange an interview with Mackay Goodwin's Domenic Calabretta, please call Fiona Hamann on 0415 191 659 or fiona_hamann@hamanncommunication.com.