Are you a director considering a restructure for your company? Corporate restructuring is quite a complicated area and can involve performance improvement, informal restructuring, voluntary administration or even liquidation of some companies within a group.

If you would like CONFIDENTIAL FREE ADVICE from a restructuring expert why not give us a call or if you’d rather us call you then use the Get FREE Confidential Advice button on the right of this page.

The restructuring process need not follow any set formula. In practice, the timing of a restructuring will be dictated by each particular situation.  A restructuring is typically considered where a company is underperforming. It will be essential where there is the potential for a viable business but the value of the business has fallen below the amount of debt and the current debt is unserviceable.

You can get a quick overview of the different types of restructurings and the corresponding solutions at The Restructuring Spectrum.

A restructuring can be achieved in a short space of time or it can take years to complete. Some restructurings can be dealt with by a company entirely internally by focusing on performance improvement. That is, it is not necessary to involve external parties such as the company’s bankers or trade creditors. In more serious situations a company will need to approach its creditors and agree some sort of forbearance by the creditors whilst the company deals with its problems. This is often referred to as a “workout“. A workout can involve an informal agreement between the company and its creditors or the company may enter Voluntary Administration to provide a legal structure in which to assess the company’s financial position and agree a restructuring plan. In the most severe cases, it may not be possible to save a company and its operations need to enter either a managed wind down or even immediate liquidation.

Where a restructuring involves creditors, the deal finally agreed between the company and its creditors need not follow a set prescription. In practice, the agreements are often quite imaginative and are designed to suit the specific needs of the situation. The risk and reward considerations revolve around the:

  • type of debt instrument taken in exchange for existing debt;
  • debt to equity exchange ratio, which will require some sort of valuation;
  • proportion of equity dividend to creditors;
  • tax treatment of the residual debt and the converted amount.

If you’d like to proceed with restructuring please CALL US NOW and speak to one of our experts.