Strategic commercial interventions: exit strategy principles

2. Definition

An exit strategy is a plan for selling or disposing of a financial or business asset when certain conditions have been met or exceeded. An exit strategy should revolve around maximising value and ensuring a smooth transition for the business where applicable.

When Scottish Ministers intervene and provide financial support e.g. a loan or guarantee, there is a policy reason to retain an interest. When intervention objectives have been met or when a business turnaround has occurred, it may be prudent to consider exit or divestment options. The business may now be in a more stable position following SG intervention in terms of management, governance processes and profitability etc, and the timing right to consider a return to the private sector.

This mirrors the approach taken by private sector lenders who will consider the route to exit (repayment of their loan) as part of the initial rationale for providing financial support.