PT BDO Financial Advisors Indonesia (“BDO FAI”) has been recently established to complement BDO Indonesia’s existing range of services, particularly in the Corporate Advisory arena. BDO FAI will focus on offering due diligence and related services as well as a wide range of other transaction advisory services to its clients.
Due Diligence
In the current business environment, with an increasing focus on appropriate corporate governance practices, far greater pressure is being put on companies to ensure that proper due diligence is undertaken for all major business decisions.
What is a Financial Due Diligence Review?
Unlike an audit, which is concerned with historical financial statements only and provides an opinion as to whether the financial statements represent a "true and fair" view of the company's operations, a financial due diligence, incorporates a greater scope. A financial due diligence review not only looks at historical financial performance but also considers the forecast financial performance for the company under the current business plan and considers the reasonableness of such forecasts.
- All companies involved in acquisitions or disposals, as buyers or sellers, need to ensure that the financial information they hold is as accurate and complete as possible. Buyers need to avoid over paying, sellers need to avoid selling for too little
- As far as the buyer is concerned data quality regarding a potential acquisition determines the deal’s ultimate success. Without ensuring that a company’s financial statements reflect reality, a deal may deliver much less than first impressions suggest
- Financial due-diligence helps to identify and focus attention on those factors in the business that will be critical for future success
How BDO FAI Helps
- We can enhance the success of a deal by investigating its potential vulnerabilities. We look deeper than a tick-box exercise to really understand client’s exposures
- We provide clients with the information they need to assess the background, reputation, and integrity of any business before entering into a substantial financial relationship
- We assess the target’s quality of earnings, including the identification of overly aggressive accounting policies
- We analyse cash flows (e.g., working capital changes, capital expenditures, etc.)
- We review on and off balance sheet assets and liabilities
- We identify key business drivers, trends in profitability and significant concentrations of risk
- We evaluate management’s forecast
Our highly focused approach enables us to quickly identify and understand potential deal breakers, value drivers and other areas of specific interest to our clients. We pride ourselves on our ability to work closely with our clients to ensure that we make the financial due diligence process as easy as possible for them.
OTHER TRANSACTION ADVISORY SERVICES
These encompass:
- Divestment and Acquisition
- M & A Strategy
- Deal Origination
- Buy Side Advisory
- Sell Side Advisory
- Valuation
- Capital Raising
- Project Finance
- Strategic Placement
- Refinancing
- Private Placement
- Business Recovery Services
- Business Recovery
- Non-Performing Loans
M & A Strategy
Indonesia is a huge country full of opportunities as it has both an abundance of natural resources and the fourth largest population in the world. However, doing business in Indonesia, particularly for first time investors, is not without risk for those who are not well-versed with local business practices and customs. Existing sources of information are often inaccurate and/or incomplete. Without the benefit of experienced highly knowledgeable locally based Professional Advisors, investors’ efforts to complete acquisition or divestment transactions can become subjected to extensive delays and substantial additional costs.
Deal Origination
BDO FAI’s services in this area include:
- Identifying potential counterparties and/or strategic partners
- Facilitating introductions to a pool of buyers and/or investors
- Determining financing availability in local market
- Target company assessment, including products, management, and relationships with all stakeholders
Buy-Side Advisory
BDO FAI’s Buy-Side Advisory extend to every stage of the transaction such as:
- Identifying and evaluating potential cooperation partners, acquisition targets, or as well as strategic or financial investors
- Background check on the target
- Identification of key deal drivers and deal breakers, and the main actions to go forward
- Project evaluation and advice on transaction considerations, including development of a financial model
- Identification of structural issues that may affect the transaction
- Prepare presentation materials
- Negotiation
- Closing the deal
Sell-Side Advisory
Our Sell-Side include:
- Divestiture strategic planning
- Analysis of sale alternatives
- Data room establishment
- Deal structuring and contract assistance
- Financial and transaction modelling
- Pre-deal evaluation
Project Finance
Our project finance services include:
- Financial modelling and sensitivity analysis
- Advice on structuring project contracts
- Financial structuring
- Arranging of multi-source funding
Refinancing
BDO FAI helps companies confidentially explore corporate debt refinancing alternatives in order to replace current lenders.
We use our extensive knowledge of finance markets to provide companies with clear analysis of their options and the impact to them of alternative funding routes.
We offer advice in relation to refinancing short term finance with longer term banking or capital market structures to extend a company’s debt maturity profile, increase certainty and broaden the range of funding options.
Business Recovery
Services for Lenders to Troubled Companies
BDO FAI offers banks, bondholders and other financial stakeholders a wide range of services to meet their due diligence, collateral monitoring and financial recovery needs. By providing lenders with a greater understanding of the borrower's business, we seek to identify and recommend practical courses of action to maximise lenders' returns.
We provide value-added advice and support to lenders and other financial stakeholders of troubled companies by:
- Facilitating a greater understanding of the debtor's business by assessing its current and prospective financial position and viability
- Developing appropriate turnaround plans and debt reduction programs that will lead to the greatest prospects for recovery and a turnaround of the debtor's business
- Providing advice on asset and business-segment disposals and on refinancing and fund raising options
- Achieving buy-in from management for such recommendations
- Assisting in the implementation of proposed and agreed debt reorganisation and turnaround plans
Services for Companies Experiencing Financial Difficulty
From family owned businesses to major corporate groups, we have considerable experience assisting companies in financial difficulty to deal with the demands placed on them by their lenders, and in coordinating and negotiating on their behalf with creditors, with the ultimate objective of reaching an amicable solution with all stakeholders.
We assist companies in resolving financial, strategic and operational issues and help them to improve and turnaround operations that are performing at below optimum levels. We provide comprehensive financial advisory services in relation to the restructuring and turnaround process including:
- Leading the debt restructuring and turnaround process and coordinating the work of all other professionals involved
- Advising on the appropriate form and structure of the company's restructuring plan with the aim of negotiating continued support from lenders
- Acting as the interface between the company and its lenders to enable the company's senior management more time to focus on running the business
- Finding potential new investors and potential buyers of group assets/businesses, and, if desired, negotiating with them on the company's or shareholder's behalf
Non-Performing Loans
Buy-side Services
We offer comprehensive advisory services that can be tailored to individual circumstances:
- Identifying potential portfolio investment opportunities
- Loan portfolio due diligence and valuation
- Advising on potential deal structures for proposed transactions
- Assisting in the deal completion process
Sell-side services
We can act as the financial advisor in relation to all aspects of NPL sales including complete management of the disposal process:
- Preparation for sale: Portfolio review, classification and stratification; Pooling and packaging sub-portfolios to maximise their potential value; Advising on appropriate form of investor review files, including file content and information collation/organisation; Advising on appropriate marketing and disposal strategies; Preparation of confidential information memorandum
- Investor sourcing: Identifying potential investors for bilateral deals or public tenders; targeting specialist investors for specific sub-portfolios/tranches
- Execution/completion of sale: Management of the entire portfolio sales process; Transaction structuring; Designing appropriate bidding/sales procedures; Overseeing investor contact, including Investor Invitation and Investor Qualification; Evaluation of investment proposals; Negotiate detailed terms; Coordinating the involvement of legal and other advisors
Why BDO FAI?
- We bring to all assignments our deep understanding of local business practices, our in-depth relationships with our clients as well as extensive hands-on experience in all aspects of Indonesian corporate financial advisory
- This deep local knowledge of, and experience in, the Indonesian corporate financial advisory sector means that we can quickly identify potential trouble spots in acquisition or divestiture transactions. We provide genuine value-add to all due diligence assignments