Steve Russell, head of Business Restructuring Services at PwC UK, said:
"The current challenges facing UK companies and their directors are unprecedented and acute. These measures announced by the government are designed to help rescue more businesses, safeguard jobs and manage the wider economic implications.
“A framework which makes it easier for directors to keep their businesses running while complying with their creditor responsibilities, allowing them to focus on the longer term while preserving jobs in the short term, will be welcome.
"There are many company directors genuinely trying to navigate the right path in exceptional circumstances. The changes to the 'wrongful trading' guidelines should help alleviate much of the anxiety they may have been facing in relation to ongoing trading decisions.
"It is critical for boards to be able to focus on riding out the current uncertainty and for the UK government, businesses and all stakeholders to have a rescue procedure fit to address the specific challenges of returning the country to economic wellbeing once the current crisis has receded.
“It is also key for all companies impacted by COVID-19, irrespective of their size, to urgently stabilise their cash position and review all elements of their business to assess what efficiencies can be driven out of their working capital, operational processes and supply chains. Businesses that act quickly now are likely to be best positioned to bounce back once COVID-19 has been contained.
“Companies have a wide range of stakeholders such as lenders, credit insurers, credit card companies, pension schemes, customers and suppliers, who will all want information from management. Engaging in early discussions is key. Stakeholders can only play their part in supporting companies if there is clear communication of the current financial position and what is needed from them.”
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