CTP TALK
An Interview with Ioana Necula, CTP and Founder of Romexterra Finance Group
CTP TALK is an interview series where we ask senior CTPs to share details of their careers, motivations, challenges, and advice.
In this interview, we talked with Ioana Necula, a CTP, Member of the EACTP, Board Member of TMA Romania and Founder of Romexterra Finance Group.
Between 2009-2013, Ioana restructured her own leasing company with the first good bank-bad bank model seen in Romania. Since its success, she has been providing restructuring services and finance for companies in distress and gets great satisfaction in helping companies out of situations her own company once found itself in.
Ioana also tells us what it’s like to operate in an emerging market and what she considers is her proudest career achievement to date.
Question: How did you first become involved in turnaround and restructuring?
Ioana: The first time I was formally introduced to the concept of turnaround was at a conference. At the time I didn´t think much about it and certainly didn’t think it would become a passion of mine. However during the explosive expansion that Romania was experiencing prior to the world financial crisis, I found myself asking if it was too good to be true and tried to anticipate what might be around the corner. In trying to predict the unpredictable and mitigate against it, I needed to employ many key skills of the turnaround professional and it has since become a focus in my career.
I think I was drawn to turnaround because, ultimately, I have always been an entrepreneur and enjoy the challenge of helping to resolve difficult situations. And that’s a good thing too because Romania, as a still emerging market, presents many difficult situations for entrepreneurs. It can be a real challenge to source and recruit people with the right knowledge to develop products and services and drive motivation for delivering good quality services. Entrepreneurs, myself included, often find themselves fighting with the ghosts from Romania’s communist history which created dysfunctional patterns in our society that are difficult to shift.
I like to create things, to improve them, to learn from other countries and to help Romania grow. I like knowing that what I do contributes to a better future and I feel satisfaction when my input succeeds in improving a situation. That’s a huge part of turnaround work.
Question: In 2009, you implemented the first ‘good bank-bad bank’ restructure in Romania on your own company. Can you tell us about it? As a new structure in Romania, was it difficult to get stakeholders on-board?
Ioana: This came about because at the end of 2008, an investment fund caused my company to enter into a distressed situation and I found myself in the position of having to save it. As the only shareholder in the company, I had to strategise everything myself. When some of the company’s creditors cancelled their loan agreements with us, I realised that the world financial crisis was hitting Romania and I started to look for solutions in the leasing industry in which my company operated.
I am a voracious reader and in an industry publication I read about the good bank-bad bank model. I realised it could allow me to save my company’s good assets from the bad ones and so I started to read more about the model and analyse if it could work in my case.
But once I decided it was worth trying, I came up against resistance. As a new model in Romania, the company’s creditors did not know anything about the process and being scared for their own companies’ health, were not very cooperative. Up until the crisis my company had been a perfect client and so I was surprised they weren’t more willing to help try to save it. I realised, however, that they were more scared than me and were concerned about their own companies.
I was therefore lucky that one of my creditors, the biggest one, had a very good professional workout manager that was just brought in to implement something similar for the bank, so together with him I succeeded in implementing my plan.
Unfortunately, it was impossible to bring all the stakeholders on-board and so we had to use an insolvency procedure. While the stakeholders weren’t all opposed to the plan, this was necessary because they were caught between procedures, board meetings and poor knowledge of the situations. But I was lucky that I had a very good judicial administrator that was a turnaround professional as well, among the first and very good ones in Romania who was also my mentor in this field.
So with a great team helping me, we implemented an emergency plan, bringing together all the stakeholders, new money, new clients, and new business. It took a huge effort and was very taxing, especially because some of my staff left. While I took this hard at the time, I know now that it was difficult for my staff to believe that we could pull through and be brave enough to stand by a distressed business. What helped was that I had a very good CFO that, having just joined the company, didn´t run. I still work with him today as he is a partner in the new company we formed.
Finally, at the beginning of 2011 and after several years of hard work and six months of insolvency we implemented the first good bank-bad bank model in Romania. It was a great success. We also became the first company in Romania to receive new money from banks after having been in an insolvency procedure. That was the second big success.
And to complete the journey, in 2013 we bought one of the most well-known leasing companies in Romania, taking us to new levels of growth and cementing our position in the market. Those few years were quite a journey!
Question: What has been your proudest career achievement to date?
Ioana: Without doubt, my proudest career achievement to date has been that I was able to save my own company and lead it to become a flourishing and innovative financial institution that now provides loans for companies that are in distressed situations. I love that I can help other entrepreneurs and when I see their smiles after a long, stressful journey, it means a lot to me.
Having been in that situation myself also means that I understand any emotional situation stakeholders might find themselves in. I have good understanding of stakeholders´ perspectives, and that helps to keep communication open and free-flowing. I was very open with my stakeholders and it paid off in the end.
Question: You have been on the Board of TMA Romania for 8 years. In that time, how have you seen the turnaround profession grow and develop?
Ioana: TMA Romania is a continually growing institution and the professionals that are involved are becoming more and more recognised as valuable experts. The turnaround sector in Romania is a very young one but we have already seen lots of interesting cases which I think may have helped us to develop faster than others.
To facilitate further growth, we think it is very important for the institution and its members to dedicate time to participate in conferences in other regions. Doing so means we can learn from turnaround professionals in other jurisdictions, apply them in Romania and continue to build expertise within the Romanian market.
Question: How important do you think continued education is for career progression?
Ioana: It is extremely important to do formal continued education for career progression and I especially think this is crucial in the turnaround profession. Turnaround professionals are exposed to many industries and a lot of specialties, so you need a broad range of knowledge and experience. Most important however, is to know when to call for other specialists. You should never believe that you are the only one.
To me, reskilling and upskilling are part of the definition of turnaround management. A few years ago I earned a teaching certificate and started to teach high school students using case studies. Having my students interested in these situations is a great opportunity to review some of the most interesting and famous turnaround cases.
Question: What advice would you give to your 25-year-old self?
Ioana: My first piece of advice to myself at 25 would be to get educated to truly understand what you are up against. I always loved to learn but I would advise the 25-year-old Ioana to learn enough to understand the important issues and know the tough questions to ask yourself and your stakeholders. I would advise her not to spend too much time bogged down in the weeds when the business is in trouble but to focus on the long-term strategy. Life is a like a race but it’s important to remember to look up, breathe and smile!
About the EACTP
The focus of the European Association of Certified Turnaround Professionals (EACTP) is to educate, train and certify turnaround professionals and for the CTP qualification to be recognised as an industry-standard ‘kitemark’ of quality in the practice of turnaround and restructuring.
It aims to promote turnaround ahead of insolvency, thus saving more jobs and value in the public and national interest.
The EACTP promotes the benefits of turnaround ahead of insolvency through engagement with shareholders, company directors, business management organisations, creditor groups and governments.
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