Author: John Gelmini / March, 2021
Current Economic climate and today’s solution
“UAE Preventive Measures” outlines the legal measures under Federal Law No. 9 of 2016. These measures are being taken to deal with business failures and bankruptcy following the Coronavirus pandemic.
Excellent as these measures are, they have no bearing on the overall economic state of the various Emirates which have been hit hard by:
· Falls in the price of oil
· CORONAVIRUS and related mitigation measures
· Loss of tourism revenue
· Job losses
· Income from health tourism
The option of waiting until the Coronavirus pandemic ends is no longer viable as no one really knows when it is likely to end. More inward investment is a possibility, but as coronavirus decimated business, investments are likely to be small.
The solution in the past might have been more overseas sales by UAE companies, but now, since 2018, organic growth has slowed. In 2012, 63% of global salesforces achieved their target, whereas today, the figure is 49% and falling. This applies to face-to-face, web and call centre sales.
Websites that used to facilitate one-and-done sales until July 2018 now require that the prospective customer be taken offline for additional treatment.
Looking at the overall toolkit of economic measures available to the UAE, the conclusion is clear. The existing tools and measures are inadequate and not fit for purpose.
The non-financial due diligence approach
So what is to be done?
To produce more foreign exchange, the various Emirates, their Sovereign Wealth Funds, and the remaining viable companies must go out and take on more M&A transactions. These cannot be concluded in the traditional way focused on historical data, which comes from legal and financial due diligence. This is because this approach results in grossly inflated costs and overpayment.
Our Truedil approach using non-financial due diligence does away with these problems by looking at 26 non-financial due diligence factors.
This focus results in lower, more realistic valuations, faster return on investment, and far better integrations than the 15% success rate currently achieved.
The intensive 2-day training from Truedil is unique and bridges into a more in-depth 5-day course for more senior course participants.
These courses can be delivered over the internet or in person in socially distanced format.