Advisory Services - Restructuring

Question 1

When is restructuring needed

Answer 1

Insufficient cash

Question 2

Restructuring vs Liquidation

Answer 2

When the recoverable portion of debt is higher, the companies will go for restrucuring. Otherwise, they will just go for liquidation

Question 3

What’s left and right of the balance sheet

Answer 3

Assets on the left and Liabilities and Equities on the right

Question 4

Asset restructuring - 1

Answer 4

Sale of non core assets. Does the company have non core assets that significant market value but are unnecessary for the business

Question 5

Asset Restructuring 2

Answer 5

Reduce spending on Cap ex

Question 6

Asset Restructuring 3

Answer 6

Sale of a controlled entity

Question 7

What’s liability restructuring?

Answer 7

Agreement with the creditors to alter the condition of the liabilities. For example, suspending interests, Debt write-off, Debt-Equity swap, Convertible bonds

Question 8

What are the three parameters that creditors will look for?

Answer 8

Probability of default, Loss given the default/liquidation and Successful restrucuturing