Concept of debt restructuring
1 answersQuestion asked ( August 19, 2009 , Shopping / Finance )
I work as a finance executive and we currently have a mandate from our board to look at options for debt restructuring within our company. I’m unsure if it is right on my manager’s part to expect me to know debt restructuring. But, i wouldn’t want to take chances. Can someone help me understand the concept of debt restructuring please?
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Answer
Hi. Given the current economic climate it is not uncommon for large organizations to work on debt restructuring plans. Debt restructuring in simple words is re-structuring or altering the current terms of your organizations debt obligations to leverage and get some advantages out of it. In the current economic situation, every organization is short of cash. So it may be vital for organizations such as yours (possibly leveraging a lot on debt capital) to re-structure debt to possibly release working capital or use funds for other operational purposes. Some of the debt restructuring terms could be reducing payments, extending tenure of payments etc.
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