Due Diligence study of an agriholding at the request of the investor
One of the largest grain traders in Ukraine hired Kreston GCG to resolve the corporate conflict.
- Objective determination of the reasons for low financial results of the holding and inability to pay the initially determined amounts of dividends;
- Determination of the extent to which the partners fulfil the undertaken obligations and assessment of the impact of unfulfilled obligations on business efficiency.
What was achieved:
1) The fact of losses incurred by the holding as a result of irrational planning of sales dynamics has been established.
2) A number of other problems that influenced the holding’s performance has been identified:
- Low quality of management accounting;
- Economically ineffective operations;
- Inappropriate use of funds (capital investment with simultaneous attraction of expensive loans to cover “cash gaps”);
- Low quality and low level of formalization and coordination of plans of the holding and the terms of obtaining investments.
This corporate conflict could have been avoided, or its negative consequences could have been reduced if proper pre-investment due diligence study was conducted, and if development and coordination of strategy and operational plans, as well as set up of independent control of business activities had been provided.
Kreston GCG conducted a due diligence, which resulted in the client’s decision to reorganize the business and replace its top management.
- CLIENT One of the largest grain trading holdings in Ukraine
- SERVICE Financial statement audit
- INDUSTRY Agriculture
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