Malu Pty Ltd was engaged by a restructuring firm to assist their engagement with a biopharmaceutical consortium listed on the NZ Stock Exchange. Our role was to conduct comprehensive financial modelling aimed at reducing the consortium’s cash flow burn rate from $500K to $150K (NZD) per month. The project involved cost-reduction strategies, pricing adjustments, and risk assessments across four business lines: Research, Agriculture, Manufacturing, and Sales.

Challenge

• A monthly cash flow burn rate of $500K (NZD) across its four business lines, posing risks to its long-term financial health. • Urgent need for cost reductions and operational efficiency improvements to ensure sustainability. • A restructuring agreement involving multiple funding sources, introducing potential contractual risks that required mitigation.

Solution

Malu Pty Ltd conducted financial due diligence and developed comprehensive restructuring strategies for both projects: • Identified opportunities to reduce or eliminate costs across four business lines. • Revised product pricing strategy to align with financial goals. • Analysed potential contractual risks for each funding method to inform commercial recommendations. • Engaged with internal and external stakeholders to manage expectations during the restructuring process.

Outcome

Results Malu Pty Ltd’s financial due diligence and restructuring efforts yielded the following outcomes: • Financial modelling and commercial recommendations led to a 12% EBITDA uplift for the Group. • Successfully reduced the Group’s cash flow burn rate to the target of $150K (NZD) per month. • Strategic stakeholder engagement by Malu Pty Ltd ensured successful restructuring and alignment among all parties involved. Recommendations Implement long-term cost-control measures to maintain the improved cash flow position. • Continuously review product pricing and cost structures to ensure financial sustainability. • Strengthen risk management strategies for contractual agreements related to funding sources. • Foster ongoing stakeholder engagement to align business objectives with financial sustainability. Conclusion For the biopharmaceutical consortium, Malu Pty Ltd’s financial modelling and restructuring strategies successfully reduced financial risks, optimised cash flow management, and facilitated a sustainable business model. The engagement highlighted Malu Pty Ltd’s expertise in financial due diligence and strategic financial management, ensuring improved financial health and long-term viability for both clients.