Small Business Restructure of a Social Enterprise at 18c/$.
Our client is an aboriginal owned social enterprise, connecting Indigenous Culture, Country, Community, the Self and the Sacred that transitioned from a sole trader to a Company in 2019.
The business is determined to break down cultural barriers, address intergenerational trauma and ‘Close the Gap’ for Indigenous people by providing reconnection to First Nations cultural practices for healing, disrupt systemic poverty through the “Our Way Home” workforce development program, and heal the epidemic of isolation and mental health crisis through providing connection and belonging, recognising that community is vital to this.
Debt
Total debt within this SBR was approximately$206,000, with $180,000 owing to the ATO.
Background
Due to government restrictions put in place surrounding COVID-19 the Company suffered significantly and was unable to provide previously offered experiences, such as face to face workshops, retreats or festivals.
This was then compounded by the loss of various significant State and Federal Government Grants due to changes in Government and the announcement of new budgets.
Proposal
The proposal provided for monthly payments over a period of 8 months, making a total commitment of $37,123.19. Creditors voted to accept the restructure proposal which resulted in a 18c/$ return.
Outcome
The business has continued to trade profitably and has taken various steps to improve its position moving forward and to ensure ongoing profitability, including:
- Review of income and implemented ways to increase revenue, eg increase offerings, setting up an online platform for Breath Work sessions, exploring further opportunities locally and abroad, relating to Arts based projects, including climate change etc
- Undertaking a review of current assets and realising assets that are surplus to the business needs
- Negotiating variations to extend current contracts on foot
- Conducting a detailed analysis of operating expenditure in order to achieve further costs savings, therefore reducing overheads.
Printable Version: SBR Case Study – Social Enterprise at 18c/$.
Contact: 1300 747 577 | [email protected]
More information on SBRs can be accessed on our dedicated page or via the Business Rescue Solutions website.
