Our Managing Director, Mr. Ajay Batra writes a regular newsletter on practical aspects of
cross border transactions.
Deal Implementation
is the stage after price
agreement and through completion to operational hand-over. It includes activities like
- due diligence
- contract negotiation
- incorporation of companies
- establishing dividend policies
- establishing capital structures
- arranging financing
- managing investment flows
- hand-over to operational management.
The requirements for these activities include a mix of financial, commercial, legal and tax skills.
The objectives
of Deal Implementation are to ensure that
the project is established so that identified benefits can
be delivered or improved, that identified and accepted risks are controlled and that
no additional risks are incorporated in to the project
during implementation.
In practice lack of time, unavailable information,
lack of skilled expertise and a lack of project management skills can contribute to a
compromised implementation.
Despite a rigorous Financial Evaluation process it is only during the process of implementation that a detailed view of the project emerges. A host of issues both small and non critical and large and potentially serious become evident. The presence of an experienced project manager who can apply judgement and isolate the serious issues is crucial. Equally, the process should contain appropriate review points at the end of key stages so that critical issues are not left unresolved whilst the company is being increasingly committed and the exposure is increasing. It is wise to forego a potential 25% return than to be exposed to loss of 100% of capital.
Some pointers towards a successful implementation are :
- Follow a systematic and structured process of implementation with identified review points
- Establish realistic implementation time scales
- Make available an experienced project manager
- Provide a clear mandate and necessary authorities to the project manager to complete the project
- Involve future operational managers early in the implementation process
- Establish realistic implementation time scales
- Make available an experienced project manager
- Provide a clear mandate and necessary authorities to the project manager to complete the project
- Involve future operational managers early in the implementation process
The need for thoroughness and the exigencies of a project can often conflict. The need for experienced judgement is vital.
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