If you’re in need of debt relief, Regent Assay’s restructuring experience forms part of our business alchemy directive. We’ll work with you to restructure your organisation, make debt manageable and re-establish your business as one that once again adds value to your space.
Debt Restructuring – The Science 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 proposition of business alchemy. Bond your business with our expertise and experience, and 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 Does Debt Restructuring Work?
Again, it’s about chemistry – the negotiating with entities for the lowering of interest rates, so that default on debts is avoided.
But what are your options, and how does it work?
We’ll break it down for you:
Debt-for-equity is self-explanatory – the cancellation of some or all debt by creditors, in exchange for equity in the business.
This may seem like an obligation-driven solution, as the company may not have any other choice – to an extent this is true – and will definitely be reliant on terms of contract where a lender may be looking to control parts or all of the business.
Another way to look at this kind of debt restructuring, though, is in our mentioned tradition of business alchemy. It’s an opportunity to rethink and re-establish operations.
This option is often significantly cheaper and quicker than court proceedings to negotiate debt restructuring.
It will involve negotiations between a debt officer, and creditor. In a nutshell, though, it’s a series of informal agreements to pay off debts on an instalment basis.
One important precaution here must be adhered to, though. Namely, the offer of instalment amounts – the paying business must only offer what can be afforded as defaulting on payments at this stage may result in asset seizures.
The economic climate is rife with potentially volatile situations for a business. One such is the need for restructuring within the organisation, due to declining financial performance.
Many reactive situations may stem from this decision in debt restructuring, like increased focus from creditors and stakeholders as they get wind of a crisis of liquidity or more debt consequences impending for the business, both of which can indicate bankruptcy. The usual outcome, then, is for lenders to request debt reviews – the gist of which will command the restructuring of the enterprise as a whole.
It’s at this stage that a restructuring entity may be called upon, to help with the management of the process of reform to get the business back into sound operations.
And that’s where our chemistry will spark with businesses in need of debt restructuring. We oversee recommendations, advise on internal structures, and join forces to bring businesses back from the brink.