Royal Bank of Scotland Restructuring and Distressed Finance, a North American-based group, advises companies (debtors) on deals to modify their capital structures so that they can survive. They also work on bankruptcies, liquidations, and distressed sales. Its Restructuring Corporate Finance team advises the debtor exclusively, working to create value for shareholders and maximizing value for creditors across a broad range of industries. The RBS Restructuring & Distressed Finance group is structured around four business lines: Revolving Credit and Asset Based Lending; Project Finance; Corporate Recovery; and Recovery.
This guide is based on my experiences at a top restructuring group within an investment bank. I will give you an overview of what restructuring solutions for investment banks banking entails followed by a more detailed description of the skill set, network and contacts you will need to break into this area. All of this will be achieved in a way that doesn’t require you to sit through pages and pages of theory or case study financial modelling which would put most people to sleep. Instead I will make this as fun, as interesting and as engaging as possible so you don’t have to suffer through another 300 page analyst report ever again.
Levy & Company represents both debtors and creditors in restructuring (RX) and distressed advisory transactions. We provide turn-around and restructuring advice to boards and management of troubled companies, as well as representation to creditors in distressed financing, distressed sale, bankruptcy and workout matters. Our firm has a strong track record in providing strategic advice to senior management and developing transition initiatives that have led to successful outcomes. We are committed to providing the highest level of professional advice to clients while bringing value to shareholders.
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Restructuring Valuation and Financial Modeling Work
You have to think about the businesses on a stand-alone basis. As you’re doing a pro forma, the value is scrap value of the assets. There isn’t a lot of value in that company buried under all that debt. You begin by taking $1 of cash flow and applying a discount rate. Then you look at historical transactions, as well as comparable companies.
When evaluating a company’s financial health, you may need to adjust its Change in Working Capital because the company may be less likely to collect receivables, and it might have to pay suppliers more quickly than usual.
WHAT IS RESTRUCTURING INVESTMENT BANKING?
Restructuring is a way to breathe new life into an ailing company, and make it more competitive for the future. This can involve cutting costs and altering product lines in order to avoid layoffs, or positioning a company to be sold so that it can thrive once again under new ownership. Restructuring investment banking deals with companies that are, above all else, salvageable – they have potential to grow and begin making money again.
The restructuring investment banking is a solution to the companies’ problems, which involves both the creditors and the debtor. Unless someone sees a need for a restructuring investment banking, no one would know that it even exists. Companies are able to know if they really need one or not through certain signs and symptoms that appear, like financial instability.
It will be very difficult for any restructuring initiative to avoid offering some form of consideration to the majority of creditors. The time frame for these offers is unclear, but it has become apparent that Fannie Mae and Freddie Mac are not the only ones with liabilities on their balance sheets. Given that, consider taking the dividend now while you still have a chance to get anything at all.
Debtor and Creditor Bankruptcy Restructuring consultants (bankruptcy restructuring lawyers) are lawyers that concentrate their work on assisting business debtors and creditors and by the way their customers (collectively referred to as a debtor-creditor committee), who are either unable to pay their debts, wish to restructure their debts, seek to ensure they collect all amounts they are owed, or protect themselves from other people taking or acquiring some or all of an asset or source of income that is owed.