4 must-haves if you’re running a restructuring process in 2020
As a result of COVID-19, companies face their biggest challenge in a generation.
Those who were in trouble at the start of the year have had their problems accelerated. Even those who were in a strong position are facing solvency difficulties as markets experience significant change.
The importance of running a quick and efficient restructuring or debt-financing process has never been more important.
But are you ready to restructure in the age of remote-working and social distancing?
Four must-have essentials of any restructuring process
Given the current rate of cash burn and revenue decreases for so many companies, if you can’t work swiftly on a restructuring process then a company will fall into the zone of insolvency quicker than ever.
It’s vital that anyone working on a restructuring process has four fundamentals in place:
1. An ability to focus on strategy
Everyone needs to concentrate on the business’ critical growth initiatives. Incomplete and inaccessible documentation, and ongoing requests for information, divert attention away from what matters most: stabilizing the business.
2. Speedy reviews and communication
Time is of the essence in any restructuring process - whether you’re recapitalizing or selling distressed assets. To avoid market forces disrupting your deal, fast and flexible access to documents is key.
3. Security and protection
The flow of highly sensitive information, from bonds to stakeholder IDs, needs to be watertight. You need to know how documents are used and shared, with future litigation on post-close disclosure claims always possible.
4. Efficient multi-party engagement
Advisors, banks, bankruptcy attorneys, court-appointed trustees… Numerous parties need to be kept up-to-date, often at different stages of the process. You need to manage creditors, track bidders, and share information with prospects in seconds.
Reduce restructuring complexity
You will turn around a business’ fortunes far quicker in 2020 if you are able to keep information and communications secure and streamlined. This is where we at EthosData come in.
Amongst other activities, using EthosData you can seamlessly manage any complex restructuring process, collaborate effectively with a recorded, encrypted, and categorized Q&A, increase bidder interest, and speed up buyer review.
This is how the advisory firm BDO India was able to recently save Bhushan Power & Steel Limited (BPSL) - one of India’s leading and most renowned steel companies.
EthosData in action: saving Bhushan Power & Steel Limited
BPSL had become one of India’s most in-debt firms and, in October 2017, BDO was tasked with restructuring it. The Central Bureau of Investigation was also accusing BPSL of fraud.
To navigate this situation BDO needed a highly secure data room and service to track all activity, attract bidders, and simplify the restructuring process.
With EthosData, BDO was able to:
- Watermark documents with a user’s IP address and email ID
- Slash costs (travelling and legal) with multiple global parties able to access and review critical information
- Save time thanks to EthosData managing various daily tasks
- Run and secure a deal quicker
Fast forward to 2020, JSW Steel (one of the fastest growing companies in India with a footprint in over 140 countries) was able to acquire BPSL for $2.7 billion.
Want to talk about your next deal?