Voluntary Administration
A process designed to provide debt relief while prioritising business recovery and continuity.
Q&A
What is Voluntary Administration?
Voluntary Administration (VA) is a formal process designed under Australian law to provide financially distressed companies with an opportunity to restructure and maximise their chances of survival. VA offers a structured approach to evaluate and implement strategies for business recovery and continuity, prioritising the stabilisation and potential revival of operations. This process can give your business the breathing space needed to reorganise or to find a way to pay off debts while keeping the business operational.
the process
The Voluntary Administration (VA) process is structured to be relatively swift, and aimed at resolving the company’s financial issues efficiently to minimise disruptions. Our restructure process is your pathway to a more resilient and prosperous future.
Comprising six strategic steps, we will collaborate closely with you to navigate the complexities of reorganisation.
Initial Phase
Company directors appoint an administrator, usually when the company is insolvent or is likely to become insolvent.
Protection Period
The company gains temporary protection from creditors, stopping all lawsuits and collection activities.
Operational Review
The administrator assesses the company’s operations, finances, and structure to identify viable options for recovery.
Creditor Meetings
The administrator holds meetings with creditors to present findings and propose future steps, which may include restructuring plans.
Decision Making
Creditors vote on the administrator’s proposal, which can range from returning control to the directors, accepting a deed of company arrangement, or proceeding to liquidation.
Outcome Implementation
Depending on the creditor’s decision, the company either restructures under agreed terms, returns to normal operations, or enters liquidation.
Strategic benefits of a Voluntary Administration
What we help you achieve
Moratorium on claims
Upon entering VA, most creditor actions are halted, providing the company with protection and time to reorganise without external pressures.
Focus on business recovery
VA focuses on assessing and implementing ways to make the business viable again, including restructuring debts and operations.
Expert management
The administrator, an independent expert, takes control of the company to ensure unbiased decision-making focused on the best outcomes for creditors and the company.
Case Study
Commercial printing business
BACKGROUND
This long-established commercial printing firm had a valuable equipment base and solid reputation, having served clients for 30+ years. However, the company was weighed down by huge rents on aging warehouses and outdated work practices that were hampering productivity and profitability.
CHALLENGE
With creditor pressure intensifying due to ballooning rental costs and inefficiencies, the business was rapidly burning through its remaining working capital. They faced potential bankruptcy, which would see their specialised equipment assets dispersed in fire sales, wiping out equity. 60+ jobs were at risk if drastic measures weren’t taken.
SOLUTION
Store portfolio assessment
We conducted a review of all retail locations and identified underperforming stores for downsizing.
E-commerce development
We assisted in developing an e-commerce platform that integrated with the existing supply chain, enabling online sales.
Supplier negotiation
We renegotiated supplier contracts to lower costs and improve terms, leveraging the new e-commerce platform.
Customer loyalty program
We introduced a customer loyalty program to increase customer retention and gather data for marketing.
OUTCOME
• Operational costs were cut significantly through workforce flexibility and modern production practices.
• 50+ jobs were preserved during the restructure process.
• The company emerged from VA as a debt-free, downsized operation able to focus purely on its core competencies and major accounts once again.
Why AVA Advisory
Voluntary Administration Experts
Leverage our expertise supporting hundreds of directors and owners of SMBs like you navigate complex financial challenges.
AVA Advisory turned our company around when we thought all was lost. Their hands-on approach and expert guidance through the Voluntary Administration process were instrumental in our recovery.
