If you’re in need of financial relief, Regent Evolution’s restructuring experience forms part of our corporate finance offering. We will work with you to restructure your organisation, make debt manageable and place your business back on a sound footing.
Debt Restructuring – The skill of Refinancing
There may come a time – especially in today’s economic climate – that your business faces financial distress.
It’s times like these that you can rely on our Partner’s experience, as business owners or managers, of having sat on your side of the table. With our expertise and experience we’ll work to help you bring your operations back to full value with our debt restructuring services.
What is Debt Restructuring?
It’s simply a measure to restore a business’s liquidity, and so its continued operations, by undergoing negotiations with lending entities.
This is done through endeavouring to reduce a debt and extend payment terms and is often the primary method for businesses to refinance, even if borrowing and credit becomes reduced in the process.
How Debt Restructuring Works
Debt restructuring is primarily about ensuring that a business can avoid a default by repaying the capital and interest payments on its debts on time .
But what are your options, and how does it work?
We’ll break it down for you:
A Debt-for-equity-swap is self-explanatory. It involves the cancellation of some or all debt by creditors, in exchange for share capital in the business.
This may seem like an obligation driven solution, as the company may not have any other choice. This maybe true but key to the negotiation is the terms of the contract with the lender who may be looking to control parts or all of the business.
Another way at viewing at this kind of debt restructuring, though, is it’s an opportunity to rethink and improve the capital structure of the company.
This option is often significantly cheaper and quicker than court proceedings.
It involves negotiations between a debt officer, and creditor the outcome of which is a series of informal agreements to pay off debts on an instalment basis.
One important precaution to consider in the offer of instalment amounts is the business must only offer what can be afforded as defaulting on payments at this stage will almost certainly result in asset seizures.
Restructuring is mostly associated with the declining financial performance of the business.
Many reactive situations may stem from the decision to restructure a debt, including increased focus from other creditors or stakeholders, who will see the restructure as an indication of impending bankruptcy. The usual outcome, then, is for lenders to request debt reviews – the eventual outcome of which will be the restructuring of the enterprise as a whole.
It’s at this stage that a restructuring entity may be called upon, to help management with the process of reform to get the business back into a sound financial footing.
Our service includes providing recommendations, advising on internal structures, and overseeing the agreed way forward bring the businesses back from the cliff edge of Administration or Liquidation.
If you’re in need of financial relief, Regent Evolution’s restructuring experience forms part of our corporate finance offering. We will work with you to restructure your organisation, make debt manageable and place your business back on a sound footing.