We also assist our clients in Financial Re-Structuring. Our Services in this field includes:
In debt restructuring, the borrowing party must negotiate with the creditor to create a situation where both parties are better off. If you know you cannot make timely payments on your loan, or if a layoff has compromised your financial stability, then it is often prudent to begin talks with the lenders. Lenders don’t want borrowers to default on their loans because of all the aforementioned costs of bankruptcy.
What Is Debt Restructuring?
Debt restructuring is a process used by companies to avoid the risk of default on existing debt or to take advantage of lower available interest rates. Debt restructuring can be carried out by individuals on the brink of insolvency as well, and by countries that are heading for default on sovereign debt.
How Debt Restructuring Works
Some companies seek to restructure debts when they’re facing bankruptcy. They might have several loans are structured in such a way that some are subordinate in priority to other loans. The senior debtholders would be paid before the lenders of subordinated debts if the company were to go into bankruptcy. Creditors are sometimes willing to alter these and other terms to avoid dealing with a potential bankruptcy or default.
The debt restructuring process is typically carried out by reducing the interest rates on loans, by extending the dates when the company’s liabilities are due to be paid, or both. These steps improve the firm’s chances of paying back the obligations. Creditors understand that they would receive even less should the company be forced into bankruptcy and/or liquidation.
Restructuring debt can be a win-win for both entities. The business avoids bankruptcy and the lenders typically receive more than what they would through a bankruptcy proceeding.
We are pleased to introduce our company SME Fintek, which is a boutique finance and investment advisory firm offering end -to -end service to Corporate Clients, Banks, NBFCs & Distressed Funds.
Mr. Rajneesh Kumar ( Founder )
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