The debt restructuring cases reported recently in Singapore have declared it a regional insolvency hub. While pandemics hit several businesses quite hard, this crisis also brought a great growth opportunity for many others while taking early action towards successful restructuring.
The impactful combination of swift actions and early intervention in this process can make restructuring a fresh start solution for many businesses. Southeast Asia’s biggest carrier, Pacific International Lines, has recently concluded a successful restructuring of US$3.3 billion and it involved several operational, financial, and legal advisors to present the financial position before the filing of the scheme application with the court in Singapore. This early action from Pacific International Line’s management allow the company to lead informal negotiations with several creditors without even requiring protection from the court because it had enough cash in hand to lead the operations.
Singapore debt restructuring went swiftly with relevant court proceedings and was concluded just within four months.
The overall value was preserved and thus it allowed Pacific International Line to emerge from ongoing restructuring while taking benefits from unprecedented growth in the potential shipping industry.
For any financially distressed company that is looking for the best opportunities to restructure debts, it may be much more convenient to enter consensual restructuring plans along with relevant stakeholders and existing creditors. This process also involves entry to contractual agreements from stakeholders to agree over a standard debt restructuring plan. It also involves adequate detailing on targets and restrictions based on new investments, proposed repayment plans, and debt compromises. Such impactful plans for corporate restructuring Singapore are expected to be more relevant for the companies that are close to insolvency. With such opportunities, companies may find better ways to settle their debts while being able to continue financial recovery and operations in the long run.
The best idea to lead such schemes more effectively is to get a trustworthy advisory consultant. The Singapore debt restructuring process requires highly accurate forecasts of revenue or liquidity, cash flow management, loan waivers with several existing banks, additional loan-related negotiations, and relationship handling with all involved stakeholders. It is necessary to create a comprehensive plan with the help of an experienced consultant so that your company can have a better turnaround.
It is possible to find some difficulties in the process; especially in formulating a restructuring plan. In case the consensus is difficult to obtain, the respective company can plan to lead court-based corporate restructuring Singapore. It can be a scheme of arrangement or judicial management; whichever is suitable for the company. However, these two options don’t involve out-of-the-court procedures because a third party is mostly involved in overseeing and managing the entire restructuring process. Therefore, the company must be very careful in leading such judicial proceedings, considering that it may trigger termination rights in a few cases. Many companies also consider a moratorium where companies are allowed to restructure their debts while negotiating a compromise with key creditors and lenders.