How to build the future for the company in crisis

It is said that at 2 o'clock in the afternoon on Sunday 14 June 1800 under the uncertain shadow of a beech tree on the dusty road that connected Alessandria with Tortona, a strangely distraught Napoleon looked up at General Louis Desaix and asked him "What do you say?". He was in fact in the middle of the Battle of Marengo, which was going badly for the French reserve army with which Napoleon had descended into Italy. Desaix seems to have replied: 'This (battle) is lost, but it is only two o'clock in the afternoon and perhaps there is time to win another'. At 7 p.m., von Melas's Austrian troops retreated beaten towards Alexandria, after the dispatch of victory had already been sent to Vienna. Such a metaphor lends itself well to the companies in the Crisis Negotiated Settlement for which the future may hold pleasant surprises like for the French army that distant Sunday afternoon.

This perspective is clearly captured by a survey promoted by the Chamber of Commerce of Milan Monza Brianza Lodi and carried out by Carlo Bellavite Pellegrini, Rachele Camacci, Claudia Cannas, Elisa Lerta and Giuseppe Damato on companies that have activated the Negotiated Crisis Resolution (CNC), an institution increasingly used to attempt an orderly reorganisation of businesses. The sample under study consisted of 76 CNC companies, of which 56 S.r.l. and 20 S.p.A., concentrated in Lombardy. These were flanked by a control sample of 120 companies, of which 100 S.r.l. and 20 S.p.A., which were not subject to proceedings. The selection of this group was made with care, favouring criteria of territorial and dimensional homogeneity, so as to replicate, in a credible manner, not only the organisational structures, but also the level of risk propensity of the companies in the sample.

The results are eloquent: the companies in CNC show, as one might expect, some distinctive traits of economic-financial distress. In particular, about 68% of the companies analysed closed the last financial year with a loss. This evidence points to operational difficulties and squeezed margins. Even sharper is the negative sign of the Return on Assets that measures the profitability of invested capital: -26% on average, compared to +4.7% among the companies in the control sample.

However, the other profitability indicators provide unexpected results. The average Return on Equity of the sample is positive, as is the Return on Investment. These are signs, albeit slight, that show how many companies, despite operating under financial strain, retain an ability to generate value. Further proof of this are the productivity indices: the ratio of turnover to total assets is higher in CNC companies than in those in the control sample. This is a very important signal that disproves the idea that companies in CNC are inefficient or decayed enterprises. On the contrary, there can still be a lot of 'life' and a future in these enterprises.

In other words, they are not irretrievably compromised realities, but enterprises that, if properly supported, can still generate value. They do, however, need time to reorganise and acquire an adequate financial structure, in the context of which leasing is particularly important, precisely because it allows time.