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DRS s. r. o.

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Solutions

Internal Restructuring

 

We will analyse the financial and operational aspects of the company and seek ways to reduce the debt burden without direct creditor negotiations or court filings.

 

The key points of this approach are as following:

  1. Informal and confidential
  2. Low risk
  3. Can be very quick
  4. Debts can be reduced using any of the following:
    - Increase operational efficiencies
    - Reduce costs
    - Renegotiate key contracts
    - More aggressive and competitive procurement practices
    - Better and more relevant KPIs

 

Informal Debt Restructuring

 

This approach is similar to a court approved restructuring but without involving the courts.  The business is analysed, key areas of debt restructuring are identified and a restructuring program is prepared to significantly reduce the existing debts of the company.

 

It may involve some of the steps required under internal restructuring plus the following:

  1. Preparation of business plan showing the potential of the business
  2. Preparation of pre- and post-restructuring balance sheets and cash flows
  3. Creditor analysis
  4. Preparation of creditor proposals and plans
  5. Road shows to present plans to creditors
  6. Creditor negotiations
  7. Drafting of new agreements with creditors.

This type of restructuring is of medium risk to the company as it is confidential.

 

 

Formal Debt Restructuring

 

This approach is appropriate when a business is relatively complex and has a high risk of adverse creditor action.  It is a US style restructuring (Chapter 11), where the company seeks court protection from creditors while it reorganizes its business and debts.

 

This is rather complex process and has many risks that have to be managed carefully. DRS has extensive experience in the techniques and strategies that need to be employed for a successful restructuring.

 

In our experience, a company can reduce its old debts by 85%!

 

Formal restructuring involves certain steps required under internal and informal restructuring plus the following:

  1. Engagement of an approved and carefully selected Trustee
  2. Preparation of Trustee’s opinion
  3. Preparation of court application
  4. Managing of information leaks before the filing
  5. Court filing
  6. Customer and Supplier PR to mitigate risks after filing
  7. Enforcement against unlawful suppler actions
  8. Managing supplier action in jurisdictions outside the court protection
  9. Creditor groupings for purposes of preparation of creditor plans
  10. Road shows to present plans to creditors
  11. Individual creditor negotiation
  12. Preparation of formal agreements

 

Investor Search

 

In almost all cases, a supplementary step of a successful restructuring may be to secure additional capital for the business going forward.  A business that is virtually debt free and with a good future is very attractive to investors and can secure inexpensive capital!

 

DRS will suggest approaches if appropriate to identify and approach investors or investor groups.  We will use our rich network and parts of the process used in debt restructuring to secure additional investment.