INTOUCH: KPMG Corporate Doctor Returns

Business advisory firm KPMG is returning to the world of corporate restructuring with the appointment of Des Hammond as head of corporate restructuring services in New Zealand. Chairman Jan Dawson made the announcement last month.
KPMG’s restructuring services will focus on strategic review of client’s position and the development and implementation of tailored strategy to turn around business performance, Dawson says.
Hammond has 30 years’ experience of corporate development and banking leadership.
He notes that the corporate market in New Zealand has changed dramatically this year but the downturn in the economy is fundamentally different this time round.
“The last major downturn in 1987 followed stock market crash and major change in long-term savings and investment patterns. This time, the corporate and funding structures are more complex and we see funding rather than an economic crisis impacting on the debt and equity markets,” he says.
“Interest rates have risen in New Zealand and Australia as direct result of inflationary pressures and re-rating of credit risk and liquidity premiums. Market research also highlights significant shortening of liquidity profiles of financial institutions and corporate debt security markets. The Reserve Bank has recently highlighted the need for better balance of debt maturity profiles in the banking sector.”
Hammond says corporate strategy has tended to shorten during recent growth periods toward focus on the next transaction rather than longer term view of market viability.
“The credit crunch isn’t just about residential mortgage securities, it’s about debt structures generally. rebalancing of debt profiles and equity is going to be critical corporate health measure and will naturally return to focus on sustainable cash flow,” he says.
KPMG will focus its restructuring services on solvent workout and recovery where the demand for the chief restructuring officer role has re-emerged.