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Post Covid-19, restructuring needs to be embraced instead of being shunned by companies and governments in Belgium.

17 June 2021
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Launch of BeTA

Today, the Belgian turnaround and restructuring community launched BeTA, the Belgium Turnaround Association. BeTA wants to become the collective voice of the turnaround and restructuring profession in Belgium. By doing this, it wants to play a pivotal role towards policy makers, companies in financial difficulties, unions, creditors, investors and the wider public when it comes to successfully managing difficult corporate situations across the country.

BeTA is the first multi-disciplinary body in Belgium to bring together professionals from across public and private investors, private equity firms, bankers, lawyers, consultants and financial advisors, who are all key to the successful delivery of turnaround and restructuring plans. BeTA has the support of over 40 professionals and firms from across the Belgium community. The launch of BeTA will bring Belgium finally in line with other major European countries, which all have their own professional turnaround and restructuring body.

Highly needed in turbulent times

The timing of the launch is no coincidence. Many companies are preparing for the re-opening of trading and the relaxing of lockdown rules. During the coming months, stakeholders will have to make difficult decisions, which have been delayed due to the Covid-19 pandemic. In fact, the furlough measures of the Belgian governments have resulted in a 32% decline in insolvencies in Belgium in 2020 compared to 2019. BeTA expects that companies will now need a regulatory framework, professional help and expert advice to survive and restructure the next 12 to 18 months.

The Covid-19 pandemic and the related lockdown measures faced many companies with an uncertain future. Not only has profitability declined, but also debt positions have grown, due to postponed capital repayments, postponed VAT, social security and corporate tax payments, or new debts to cover for liquidity shortages during this last year. These financial setbacks, in combination with increased liquidity need to kickstart businesses, will result in difficult challenges for many companies.

BeTA wants to change the negative perception of turnaround and restructuring in Belgium

Philippe Fimmers, Chair of BeTA’s steering committee, noted that “too often in Belgium, restructuring and turnaround are seen as a failure and part of the problem. As is the case in other countries, it is essential to get away from this viewpoint and see it as an opportunity. Post Covid-19, restructuring needs to be seen as a solution to save businesses and employment in Belgium.”

Leading turnaround and restructuring professionals and firms are urging the government to promote a culture of business rescue and to update the current legislation to limit the negative impact of potential insolvencies. The members of BeTA strongly believe that Belgium needs more flexible legal tools to limit unnecessary and value-destroying bankruptcies once the government support finalizes, and to save a maximum number of jobs and companies from bankruptcies.

Michel Bonne, BeTA Steering committee member, noted that “BeTA welcomes the legislation approved by the various Belgian governments over the last year to render existing rules more flexible, to help companies avoid insolvency, and to save jobs”. He goes on to say that “the upcoming implementation of the European Restructuring and Second Chance Directive into Belgian law offers a good opportunity to think through our current restructuring legislation. Unlike some other countries, Belgium does not have a strong tradition of shaping and selling its legislation as a tool to attract business and make Belgium more attractive as a country to invest and create jobs. BeTA would like to help our policy makers to make this mental switch”, Bonne noted.

BeTA can contribute to a smooth transition to the post Covid-19 economy

Companies and the various governments face a turbulent period of uncertainty. BeTA, as specialists in the field, wants to actively contribute with its broad expertise to the debate and wants to offer a wide range of solutions that could smoothen the difficult transition period that lies ahead of us.

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