From ACT Wiki
Jump to navigationJump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

To implement any type of restructuring.

1. Financial distress.

To convert the existing debt of a financially distressed borrower into other debt or sometimes equity, which the distressed borrower is more likely to be able to service in the future.

Such restructuring usually involves losses for the creditors whose debt investments are converted in this way.

2. Corporate insolvency.

More broadly, to carry out processes relating to corporate insolvency, usually involving losses for some creditors.

Fair restructuring
" An increase in insolvencies is inevitable...
Banks have been preparing for this wave, scaling up their restructuring and workout teams, and adapting their operating model to cope with a higher volume of customers in financial difficulty.
It is critical that any restructuring activity is done fairly, consistently and quickly so that capital is redirected to help viable businesses grow in the post-pandemic era."
Serge Gwynne, partner at Oliver Wyman, The Treasurer Issue 2, June 2021, p9.

3. Financial strategy.

To implement any other significant and long term changes, usually undertaken to achieve financial improvements for the future.

Brazil's restructuring
"The Brazilian financial system has experienced a deep process of restructuring, mainly the consolidation of the number of banks, reduction of a public sector presence in the market and an increase in the participation of foreign banks."
The Treasurer's Wiki - Brazil.

See also