RESTRUCTURING FOR AN INITIAL PUBLIC OFFERING (IPO)
CASE STUDY: CAIRN ENERGY PLC
In a radical restructuring programme Wildcat One successfully lead the HR project stream in restructuring the Edinburgh Head Office.
Background
The executive management team devised a strategy to deliver optimum shareholder value by creating two world class businesses, through an IPO of its existing Indian business. This constituted an IPO on the Bombay stock exchange to raise capital for future development and exploration with Cairn Energy Plc retaining a majority shareholding in the company. This strategy required a radical restructuring of the Edinburgh Head Office in order to relocate or replicate processes, teams and other resources to India, allowing it to operate successfully as a standalone company. Proposals for the IPO were agreed by the Board and the company’s intention was announced to the market in March 2006.
Approach
Wildcat One were involved from the beginning, in a number of the initial strategic discussions which culminated in the decision for an IPO. Wildcat One was asked to lead the HR project stream in restructuring the Edinburgh Head Office. This meant working closely with the Group Management Board to identify ongoing resource requirements of Head Office and the new wholly owned business Capricorn Energy. This lead to a restructure of functions and a number of job losses. Processes for managing this were devised and implemented, working closely with the internal HR team, managers and in conjunction with employee representatives.
Wildcat One also managed communications with employees, particularly in the early stages after the announcement. This required comprehensive briefing packs for managers and staff.
Work was also carried out with department heads in Edinburgh and India to undertake an organisational gap analysis on the needs of the new Indian company, so that a comprehensive project plan could be developed. Relocating work streams and staff to India was complex and required working across different legal jurisdictions whilst responding to organisational and employee needs.
Result
The restructuring of Edinburgh office was completed by August 2006 with redundancies phased throughout the rest of the year and into 2007. It was successfully completed to exacting timescales with no significant employee relations problems, litigation, or reputational damage. The IPO itself was completed in January 2007.