Why a consensual process is vital in capital and debt restructure

In any restructuring process, it is important to keep all stakeholders on board and motivated to complete the deal – even when bumps in the road appear. Maintaining this consensual process can require a great deal of diplomacy, negotiation and some challenging conversations, but it is vital to get the right structure for the longer term.

Keeping key stakeholders involved in a consensual process is vital because they will all have some part to play in the final agreement, and in driving the business forward. For example:

  • a funder may be required to give forbearance or debt write-off;
  • the PE house may be required to convert loan notes to equity; and
  • the management team or directors may be required to commit to the business for the long term via equity incentives.

How restructuring advisers maintain a consensual process

As mentioned in our article on maintaining stakeholder alignment , during any restructure the directors and management teams will remain focused on managing and driving the business forward day to day. In our project management role as the restructuring advisers, we will:

  1. Get to know your key stakeholders and understand each of their positions.
  2. Review the financial position, stress test the forecasts and provide analysis of the optimum capital and debt structure that will support the business for the future.
  3. Work alongside management to negotiate the restructure, keeping all stakeholders on board and contributing.
  4. Liaise with lawyers to ensure the restructure is appropriately documented.

In short, we provide the independent voice and testing that corporate stakeholders will expect and require. Your management team may be able to deliver some, or even a great deal, of this restructuring process but they’re unlikely to be seen as independent. There’s also a real risk that some stakeholders bring in their own advisers and the process is no longer consensual.

Contact us

Our experience and track record provides the assurance that your restructure will be delivered and that your business has the best chance of thriving for the long term. Contact Gareth or Damian to discuss your business.