Restructuring Company Debt

Abstract

To decide whether, and on what terms, to restructure debt, banks must know why the company needs help. There will always be a financial problem by the time restructuring is necessary, but it may be the main problem or may result from wider failures such as: the structure of the business; unwise acquisitions financed by debt; inefficient plant and equipment; bad labour relationships and poor productivity; an inferior or ageing product; competition from other countries, companies, products, raw materials; or any other aspect of the company’s business which causes a cash drain and therefore either creates the financial problem or hinders its solution.