If you need advice on an existing credit facility, please contact us and we will do our best to help you. We have a lot of experience in credit restructuring and issues that arise and please call us or email us if you would like to discuss something that is covered in this note. The identification of value in a borrower`s business determines the form of a restructuring operation and determines the relative strengths of the parties at the negotiating table. The revised forecast and corporate plan must have an acceptable level of return for both equity issuers and investors, which can be a challenge. These options tend to be more attractive to lenders, given that an increase in equity typically provides better protection for the company`s debt and can offer lenders more “reward” to reflect the increased “risk” of lending to a troubled borrower (at least temporarily). Debt restructuring, which is widespread in the banking sector, is an effort by society to avoid the risk of default due to a financial crisis. In other words, debt restructuring is debtors` last and last option to improve credit performance in fulfilling their obligations to creditors. In the meantime, creditors believe that PKPU can maintain the continuity of debtors` business, resulting in debt repayment. PKPU`s main thoughts are business prospects and the ability to pay debt.
Debt restructuring or renunciation of Covenant also has the advantage of not accelerating the debt or integrating it into other financing agreements of the borrower. Both can also be achieved in a relatively favorable and discreet way. The term “recapitalization” refers to an entity that modifies its debt and equity shares or the organization of its share capital structure, which can be achieved in different ways. The debtor is accompanied directly by an administrator and a supervisory judge in meetings with creditors. Creditors (separatists and at the same time) are invited by the commercial court to hearings and meetings in order to agree on a permanent PKPU, composition (peace proposals), etc. Debt restructuring by PKPU can avoid possible additional conflicts between debtors and creditors and even between creditors and creditors.. . .