Thank you Msasani. This is what I was looking for, someone to give me ideas! Unfortunately, these guys are already preparing to go to court. Some hungry lawyer has convinced them they can win a case against a debenture holder!

To your points:

1. The finished goods inventories are not higher than normal. The sales have been on-going. Problem is the customers paying late or not paying at all! Largest debtor as you can rightly guess is government agencies! We have written to all customers informing them of the situation. We've held meeting with selected customers and recorded their concerns and their conditions to renew business dealings with them.

2. All suppliers have insisted on payment before delivery despite our efforts to persuade them otherwise. Some have insisted on LCs! The largest and most important one has revoked a distributorship agreement as a result of non-payment of royalties for more than 1 year. Right now, I'm preparing for a meeting with my client to inform them that we cannot lose this supplier and revive the company!

3. Chats with employees? That is done daily. I have people on the ground talking to anyone who has an opinion about the company's operations. Very enlightening I must say!

4. Agreed, though at this point, HR is the biggest payable every month. I have no choice but to cut it down by more than 50%.

5. We have retained the entire sales team with instructions to double their sales targets. We have offered commissions as an incentive and so far, they've done a good job. Sales have reached 2.5 million in one week (all COD or current cheques with a few 30 day credits)!

6. Noted! All key staff, other than the Production Manager (I've already identified a competent replacement for him) will be retained.

I wish I could handle this as a turnaround, which would be very interesting and I would need your input greatly. Unfortunately, with the anticipated civil action, I have to change my strategy to asset realisation to repay the outstanding debt to my client! According to my very conservative cash flow forecast, it would take at least 6 months to return the company to profitability (assuming no interferance from directors and all raw materials being available)!

Repayment of the outstanding debt would be a slow and painful process which my client and I are against! Asset realisation within the same 6 months would provide my client with at least 89% recovery on the outstanding debt!


Immorality: The morality of those who are having a better time!

here is an option the main shareholder ought be told about .... actually whsipered. please make sure there is no paper trail leading back to you. this company must be insured. ensure premiums are paid up. hire goons and weka tyre. show up when the blaze has consumed 80% of the co premises. shed many tears when KTN/NTV/Citizen cameras show up. then go file claim. it has been done before and i can bet it shall be done alot more this year. there come a time when.... you cut you looses and flee.... its probably criminal but....like i said,its an option the main shareholder should know about. let him deal with the 'ethical issues' around it.

He who laughs last thinks slowest..

he he Pondi! That is the easy way out! Unfortunately, or fortunately, I'm not allowed to do that!

Immorality: The morality of those who are having a better time!

Pondi wewe noma but amazingly you are extremely ON POINT!!

I also happen to be a roho safi guy................yet I want to drive the Sports Supercharged version. What do I do?

@King! I honestly don't care how he feels! That is water under the bridge for me! Plus I don't think he knows anything about stocks!

Immorality: The morality of those who are having a better time!