Corporate distress is characterised by chaos, confusion and crisis. Unless the situation is stabilised and effective steps taken to restore confidence, it culminates in the company′s failure. The key to a successful loan workout is to identify the problems accurately and address them early. It is critical that the company′s underlying business and financial problems are resolved and not merely the symptoms.
This book provides a practical guide to the entire range of issues relating to loan workouts. It is critical that an institution has appropriate systems, processes and resources to deliver successful rescues, and the reader is taken through the most important issues in this area. The book further provides a framework for a methodical, step–by–step approach to loan workouts. Technical issues involved in restructuring debt and equity, particularly in multi–lender loan workouts, are also explored in detail.
INTRODUCTION AND BACKGROUND.
Loan Workouts: What They are and Why They are Needed.
STRATEGY, PARTIES AND THE PROCESS.
A Framework for Managing Non–Performing Loans.
Organisation and Systems Relating to Non–Performing Loans.
Managing Loan Workout Transactions.
Other Key Participants in Loan Workouts.
A Framework for Executing Loan Workouts.
Turning Around a Business.
The Information Gathering and Review Process.
Exploring Loan Workout Options.
Evaluating Restructuring Options and Developing Proposals.
Negotiating and Completing Transactions.
THE MORATORIUM AND FINANCIAL RESTRUCTURING.
Establishing a Moratorium.
Financial Creditors Affected by a Moratorium
The Operation of Facilities in a Moratorium.
The Concept of Loss–Sharing.
Inter–Creditor Provisions in a Financial Restructuring.
Other Terms and Conditions.
Introduction to Debt for Equity Swaps.
Other Transaction Parameters.
Other Technical Issues.