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Financial Restructuring
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Change in Debt Structure
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Change in Capital Base |
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Change in Group Structure |
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| Change in Debt Structure . |
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Corporate Debt Restructuring (CDR) - Our strong Business relationship with leading banks and financial institutions has helped us in assisting companies to get their debts restructured. Corporate Debt Restructuring (CDR) has evolved as a voluntary and non-statutory arrangement between lenders and borrowers, for timely and orderly restructuring of debts of corporate entities affected by certain internal and external factors.
Timely corrective actions, when the assumptions made at the time the project was conceived and executed do not materialize, will go a long way in preserving the economic value of the project. To the bankers this is a crucial element in credit management. Even for an impaired loan, restoring the health through a structured restructuring exercise is the first step in NPA Management. If this fails, one needs to look for a quick exit option. Legal steps for recovery of dues take time and in the process, the value of assets goes down. For a banker time value of money is critical. Sale of the assets at the best possible price is the ideal way to recycle the funds blocked in NPAs and also clean up the Balance Sheet |
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One time Settlement (OTS) - We can assist companies in getting their long outstanding debts through ONE TIME SETTLEMENT of RBI |
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Swapping of Debts - We also assist in getting DEBTS SWAPPED through banks and financial institutions. Swapping of debt can be for cost reduction as well as tenure adjustment
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Change in Capital Base .
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Buy Back Shares - We assist companies in changing their capital base through BUY BACK of SHARES. Buy back of shares is permitted in many parts of the World. The main reasons for following this route are return of surplus cash to the shareholders, increasing underlying share value, supporting share prices during temporary weakness, and preventing or blocking hostile takeovers. Buy back is also used as a financial strategy by corporates for streamlining their capital structure, swapping equity for debt, as well as for reducing the number of shareholders to reduce the cost for servicing them, etc.
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Reduction in Capital - This occurs when a borrower makes a lump sum payment towards the capital owed on a mortgage. Also known as a partial redemption, it often has a minimum permitted amount and is a process whereby the issued capital of a company is reduced. There are two circumstances in which this might take place. These are:
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Where future operations of the company are expected to be on a reduced scale so that a smaller level of finance will be required; and |
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Where it has to be accepted that past revenue losses can never be made good and that they amount to a permanent loss of capital
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Change in Group Structure .
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Merger and De-merger within the Group Companies - |
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Merger - A legal action resulting in the unification of two or more legal entities. Such an event can be advantageous because of Economies of Scale and also give a competitive edge by synergies derived from the unification
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De-merger - The splitting of a company often originally formed as a result of a merger, into two or more separate companies. It gives the existing shareholders shares in both companies
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Amalgamation - The combination of two or more commercial companies into one unit
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