Corporate & Debt Restructuring Business Valuation Courses … · 2019-11-26 · The specialist in highly technical, market-driven banking and corporate finance training Business Valuation

The specialist in highly technical, market-driven banking and corporate finance training

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The specialist in highly technical, market-driven corporate and debt restructuring training

Corporate & Debt Restructuring Courses

All courses can be presented In-House or via Live Webinar

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Advanced Negotiation Issues in M&ADate:

Location: London Standard Price: £*** + VAT Membership Price: £*** + VAT

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PUBLIC COURSES

• Advanced Debt Restructuring • Modelling for restructuring: A 3 Day Programme• Restructuring High Yield Bonds• Corporate Restructuirng - Tax Issues

IN-HOUSE COURSES

• Forbearance• Modelling for Debt Restructuring Course• Restructuring, Turnarounds & Schemes of Arrangement• The Distressed Disposals Training Course: The Key

Negotiating Aspects• Advanced Negotiation Issues & Trends in Restructuring

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Corporate Membership Scheme

Our Corporate Membership Schemes are not valid on any courses held on an in-house basis and are in line with our standard Terms & Conditions

If you would like to enquire about one of our Corporate Membership Schemes then please call or email us for more information.

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Our Corporate Membership Scheme gives clients the benefit of discounted course places with absolutely no

restrictions.

Clients pay an annual subscription fee of £595 + VAT to receive 20% discount on all public course and conference

bookings irrespective of the numbers booked.

You Corporate Membership Scheme can be used once payment is received and will be valid for one year.

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Advanced Debt RestructuringDate: 19-20 Mar 2018, 20-21 Nov 2018

Location: London Standard Price: £1,300 +VATMembership Price: £1,040 +VAT

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In a low interest rate environment, bankers and financiers are under increased pressure to undertake more corporate business at higher returns, but at the same time ensuring a low risk weighting. Given that the business climate remains uncertain and volatile, the risk for bankers of developing problem loans through their lending activities, is therefore increasing.

This course has been designed for bankers and financiers to develop a holistic, applied approach to early problem loan workout through a range of different techniques currently applied in UK and international finance. It aims to provide the attendee with a comprehensive overview of the challenges of problem loan workout and with an insight into some of the key methods than can be implemented to assist in the recovery of their financial exposure.

By offering a range of different case studies, financing scenarios and potential solutions to workshop case studies, the attendees will be able to develop a broad applied overview of debt restructuring techniques. This is particularly important in an area of finance where ‘one size fits all’ solutions are not possible and where the financier needs to be open minded, flexible and quick to react to changing circumstances.

The programme draws from the experience of a range of different high profile debt restructuring case studies as well as the experience and project work of the trainer’s 23 year experience in debt structuring, restructuring and problem loan workout. A number of the case studies used during the course are those that have been undertaken directly by the trainer.

The course is highly interactive, with the course attendees working in project teams. They will be required to work in their project teams in devising solutions and providing recommendations to the rest of the delegates who will cross examine their proposals in a credit committee environment.

During the second day of the programme, the attendees will use forecast cash flow analysis as part of the strategic business review for the restructuring candidate. A knowledge of the working of Microsoft excel with therefore be an advantage for the attendees.

Participants will: ■ Fundamental concepts in early problem loan workout ■ Early Warning Signals in spotting potential problem loans ■ International classifications of problem loans ■ The fundamental methods and application of successful restructuring and rescheduling ■ The key methods that can be applied to successfully restructuring debt facilities ■ The aims of the problem client ■ Application of international frameworks to management the restructuring process ■ The importance of believing the restructuring strategy and the need for the independent busi-

ness review ■ The use of forecast cash flows in identifying the key risks of the recovery strategy and in as-

sessing the client’s ability to honour its debt service going forward. ■ The use of the ‘Standstill’ process in controlling the credit recovery process ■ The application of the Standstill Agreement and the cooperation of the other creditors ■ Key security and guarantees required in securing the lender’s position

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Advanced Debt RestructuringContinued

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Day 1

Session 1

Introduction to Debt Restructuring – Key drivers

■ Non-performing loans and the challenges faced by bankers

■ When to recognise the non-performing loan ■ How to deal with problem clients that have

not defaulted ■ Introduction to a framework to deal with

covenant breaches ■ Review of common reasons for company

default and the creation of non-performing loans

■ Understanding the attitude of problem cli-ents and the difference between ability to pay and willingness to pay

■ When to restructure / reschedule and when to accelerate.

Workshop – Advanced discussion of different alternative scenarios in dealing with loans in default and covenant breaches from case study examples.

Session 2

Early Warning Signals of potential distress ■ Review of key financial EWS ■ Danger levels of different financial cove-

nants in different industries ■ EWS derived from the financial statements ■ Identification of the manipulation of the

financial statements ■ Using univariate and multivariate frame-

works to identify financial distress ■ Application of the Z Score to distressed sce-

narios to identify potential failure ■ Review of the IFC’s classification and check

list of Early Warning Signals ■ The importance of identifying key external

factors affecting corporates ■ The application of GNPESTEL model to ex-

ternal risk analysis ■ Systemic risk and its impact on problem

loans ■ Identifying defects and mistakes committed

by the company ahead of time ■ Management risk and its impact on corpo-

rate recovery ■ Interrogating problem management and

understanding gaps and areas for improve-ment

■ The role, power and limitations of the lender in restoring management effectiveness

■ Strategic risk and its impact on the problem client

Workshop – Delegates in their project teams will analysis the EWS and external and qualitative risks facing a case study

problem loan, providing recommendations for how a lender could seek to improve those risks and protect itself from potential risk crystallisation.

Session 3

Identifying work out solutions versus insolvency solutions

■ The importance of understanding whether the problem loan can be ‘worked out’ as a going concern

■ The importance of and belief in the recovery strategy

■ Using cash flow forecasts to believer the busi-ness plan and recovery strategy

■ Expectations of financial performance and fi-nancial covenants under the recovery strategy

■ Deciding whether to leave the borrower in col-lateral possession or not

■ Application of the Butler Matrix ■ The IFC framework for problem loan resolu-

tion ■ The use and application of sensitivity analysis

in understanding the strength of the compa-ny’s recovery plan.

Case Study Workshop – During this session, the delegates will be given a case study project complete with forecast financial projections designed by management. Having applied the Butler and IFC frameworks to the case study, the delegates will use the excel financial model provided by the trainer, to undertake a sensitivity analysis of the forecasts financials. The aim will be for the attendees to assess whether they believe the company’s recovery strategy and its ability to honour the restructured loan’s debt service going forward.

Session 4

Different restructuring and recovery methodology

■ The concept of automatic stay and protection of the going concern from other creditors

■ Administration ■ Receivership ■ Liquidation ■ Automatic stay in administration ■ Different rescue procedures ■ Cram down of creditors ■ Position and rights of management ■ Personal liability of directors ■ Ranking and claims of creditors ■ Time limits of filing claims ■ Introduction to Standstill Agreements and

controlling the banking syndicate

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Advanced Debt RestructuringContinued....

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Case Study Workshop – During this session the attendees will review a new case study and review the potential application of the different recovery methodology discussed during the session. The delegates in their project groups will also assess how they need to engage with other creditors and assess the drafting of a standstill agreement for the problem loan restructuring.

Day 2

Session 1

Implementing the Restructuring process

■ Understanding different stakeholder objec-tives

■ Creating the restructuring team ■ The 10 point plan for effective restructur-

ing ■ The case for and against a moratorium ■ Mediation ■ Workout arrangements and responsibilities

within the lending institution ■ Protecting security throughout the workout ■ Financial projections and sustainable cash

flow and debt ■ The importance of the Independent Busi-

ness Review ■ Negotiations and pricing the workout

Session 2

Workshop – Having reviewed the implementation process and the various worked examples developed during the session, in their project teams the attendees will review a new major new case study problem loan complete with financial forecasts in an excel financial model. In order to assess whether they would proceed with the restructuring, the attendees will draft the Scope of Works for an Independent Business Review as part of their initial analysis

Sessions 3 & 4

Final Case study - Implementing the restructuring process in practice.

Final Case Study Workshop – Using a new case study, the attendees working in their project teams, will provide a complete restructuring / workout solution to the problem loan on the basis of the information covered during the course. They will required to identify the key EWS inherent in the problem loan, review the sensitivity of the forecast financial projections in the excel model and propose a schedule of the restructured loan. The team will also include terms of a Standstill Agreement, if required. A selected team will asked to present their restructuring solution to the rest of the delegates.






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Modelling for RestructuringDate: 24-26 Sep 2017

Location: London Standard Price: £1,800 + VAT Membership Price: £1,440 + VAT

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Day one covers the main divestiture options available to a firm as a going concern. We focus on private market sale, Initial Public Offering (IPO), spin-off, split-off and equity carve-out. The motives, pros and cons of each structure are explained in detail in light of precedent transactions. We also discuss financial impact including balance sheet deconsolidation and EPS accretion (dilution). Spreadsheet work and real divestiture cases are used throughout the session. Much of the course work involves Excel modelling and analysis, equipping participants with the tools to analyse divestiture transactions:

Building up from partially-complete models on real case scenarios Running scenarios, iterating and optimising Day two and three focuses on modelling restructuring for stressed and distressed companies. First, we analyse stressed corporate from a credit analysis perspective and model the debt payment and key credit ratios. We then look at gone-concern scenarios and review distressed companies. We explore and model the steps facing distressed corporates, including debt restructuring packages, in-court and out-of-court settlements and liquidation. We look at the perspective of distressed corporates, debt holders and creditors

At the end of the training, the participants will be able to: ■ Explain the differences between a stressed and a distressed company ■ Understand the valuation of a distressed company ■ Model the various options for the debt holders and creditors of a distressed company ■ Model the pecking order of debt repayment in a liquidation

Each participant should bring a laptop to the course to facilitate modelling work

DAY ONE

Introduction ■ Why do corporates divest or restructure their

assets? ■ Review of key considerations

• Strategic; • Liquidity; • Valuation; • Tax; • Regulatory and anti-competition;

■ Promoted by management, sometimes pushed for by shareholders

■ Types of divestitures • Private sale; • Initial Public Offering (IPO); • Spin-off/split-up; • Split-off; • Carve-out.

■ Financial analysis performed • Structural impact; • Balance sheet deconsolidation; • Earnings Per Share (EPS) accretion (dilu-

tion) and relative P/Es.

Private Market Sale ■ Structural considerations

• Pre-deal and post deal structures ■ Balance sheet deconsolidation ■ Tax impact of deconsolidation ■ EPS accretion (dilution) ■ Reinvesting the sales proceeds

Case study I – T-Mobile USA divestiture to AT&T

Subsidiary IPO ■ Minority vs. majority stake IPO ■ Size of the offering ■ Cost of listing and disclosure requirements ■ Trading multiples as main valuation benchmark ■ IPO discount pricing

Case study II – Citigroup listing of Primer-ica

Spin-Off & Split-Up ■ Definition, advantages & disadvantages ■ Existing shareholders receive a new share in

spun-off entity ■ Adjustment of capital structure prior to spin-off ■ Best executed with traded stock for valuation


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Modelling for RestructuringContinued...

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■ purposes ■ Ownership structure impact ■ Balance sheet impact - treatment as divi-

dend-in-kind ■ EPS accretion (dilution) ■ Split-up similar to spin-off except old parent

dissolved

Case study III – ITT three-way spin-off in Exelis, Xylem and “old” ITT

Split-Off ■ Definition, advantages & disadvantages

• Choice between keeping shares in parent company or swapping parent company shares for subsidiary shares

■ Different treatments in over vs. under sub-scription scenarios

■ Split-off structure impact ■ Balance sheet impact treatment as own

shares repurchased ■ EPS accretion (dilution)

Case study IV – Kraft split-off of post cereals business Carve-Out ■ Definition, advantages & disadvantages

• Usually initial step of a two-step spin-off and split-off

• IPO of subsidiary shares (primary/second-ary shares)

■ Financial structures typically adjusted prior to the offering

■ Carve-out structure impact ■ Balance sheet impact treatment and

non-controlling interests ■ EPS accretion (dilution)

Case study V – Mead Johnson separation from Bristol-Myers Squibb as a two-step process: equity carve-out followed by split-off Conclusion ■ Review of all strategic alternatives, struc-

tures, balance sheet and EPS impacts

DAY TWO STRESSED COMPANIES This module focuses on the analysis of companies that are solvent, but might become distressed should trading or financing circumstances deteriorate. We focus on operating cash flow dynamics (e.g.

cash conversion), capital structure issues (e.g. understanding structural issues and assessing refinancing risk) and valuation implications.

Introduction ■ Definition and review of stressed companies ■ Introduction to Dominos Pizza stressed situa-

tion Capital structure analysis ■ Using credit ratios to assess credit risk (e.g.

debt / EBITDA, EBITDA / interest) ■ Understanding structural issues

• Cash flow upstreaming issues and structural subordiantion issue

• Intercompany debt guarantees, multiple bor-rowers with joint & several liability, intercom-pany loans, etc.

■ Assessing refinancing risk ■ Market data (credit “spread” to measure credit

risk, bond prices & bond yields, CDS and credit indices), sources and reliability of data

Financing issues ■ Different debt products and which companies

realistically have access to them and what creditors look for in re-financing / new financ-ing

■ Debt terms & conditions including credit ratio covenants and the potential to trigger early debt repayment

Case study I – Dominos Pizza – detailled modelling and full credit analysis

DISTRESSED COMPANIES Objective This module focuses on the analysis of companies that have become distressed. We focus on reviewing the capital structures and model different alternatives, including liquidation and restruturing the debt package taking into acccunt the perspectives of the different equity and debt holders. Insolvency and Valuation ■ Balance sheet involvency ■ Cash flow insolvency ■ Link between Entreprise Value and Equity Value

• Equity value is zero and debt trades below book values





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Subordination ■ Secured vs. unsecured ■ Contractual ■ Structural ■ Guarantees

Strategic Options ■ Raising capital ■ Debt restructuring (out-of-courts) ■ Debt restructuring (in-court) ■ Asset sales ■ Sell the business ■ Liquidation

Valuation Methodologies ■ Liquidation vs. going concern ■ Liquidation value

• Recovery rate ■ Going concern

• EBITDA multiples

Valuation issues ■ Limited time for due diligence ■ Usefulness of historical record as a proxy for

the future ■ Management issues

DAY THREE

Recovery Values ■ Asset liquidation value usually estimated as a

% of book value ■ Most liquid assets (cash and marketable se-

curities): 100% recovery rate ■ For most assets only a fraction of book value

recoverable ■ Liquidation fees

Case Study II: Modelling of different recovery values of an industrial company

Priority Ranking ■ Contractual subordination

• Senior, subordinated, preferred and equity ■ Security ■ Structural subordination

• Borrowing entity • Maturity • Guarantees

Distressed Companies – Financial Modelling ■ Workout of Schefenacker, a German auto-parts

manufactuer ■ Valuation of companies under different options

• Going concern, liquidation and restructuring ■ Modelling of the debt under restructuring sce-

narios • Debt forgiveness, payment extensions,

debt-equity swaps

Case study III – Detailed modelling of Schefenacker workout




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Restructuring High Yield BondsDate: 6 July 2018, 09 Oct 2018

Location: London Standard Price: £695 + VATMembership Price: £556 + VAT

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The programme will review the impact of the draft ECB guidance on leveraged transactions.

Restructuring high yield bonds pose a range of challenges not found in dealing with purely loan-driven structures; custody chains means that noteholders are more difficult (and take longer) to identify; the listed nature of notes means that all stakeholders need to be aware of market abuse aspects; the machinery for instituting action in bonds is more convoluted than loans, since notes are invariably governed by NY State law restructurings may need to take account of compliance with onerous U.S. securities’ laws and last, bond restructurings often use different tools not available in loan structures, such as Exchange offers and consent solicitations (which can be used to covenant strip notes in certain circumstances). The market has also experienced an increase in coersive exchange offers where parties have made use of innovative solutions to encourage holders to accept and discourage holdouts from remaining on the side-lines. DTEK’s triple track Exchange offer, Scheme and consent solicitation being an excellent example.

This programme summarises the methods and tools that have been used to restructure bonds and reviews some of the topical and innovative solutions that have been used to address these more complex restructurings. English schemes of arrangement have gained increasing traction in the bond markets, as they have in the loan markets, and appear to have emerged as the primary pathway of choice in a number of recent restructurings for foreign companies. Despite this Chapter 11 does offer some solutions not available in a Scheme, for example where operational restructuring is required. The programme will illustrate these methods with discussions of recent landmark restructurings including; Zlomrex (parallel Exchange offer and Scheme), Metinvest (Standstill Scheme), Privatbank, Edcon, Codere.

The course will also review the current potential cross-border restructuring options for CGG Restructuring which potentially could involve either US or French pathways or both simultaneously.

The programme will also review the key points of the Draft EU Directive harmonising restructuring and insolvency matters published on 22nd November 2016.

Introduction ■ Bond Restructuring routemap: overview of the

stages in the process ■ Overview of current Loan/ Bond structures

(what’s market)• SSRCF/Senior Secured Notes• Pari Loan/ Bonds

■ Double Luxco – has back on the agenda

Restructuring triggers ■ Review of the key EoDs in Notes ■ Key EoDs in Loans which will trigger earlier than

Notes ■ Asymmetry of information between Loans and

Notes ■ Other aspects which may give lenders a head

start over the Notes

Gaining leverage ■ Key voting thresholds for Notes ■ Problem areas

• “One Euro One vote” the Schmolz problem in Germany legislation

• Numericable’s change of voting cap• The Bakkavor problem & hedging issue (Who

controls the Restricted Group) ■ Key voting thresholds for loans (vis-a-vis the

Notes) ■ Impact of distressed disposals & release of col-

lateral pre and post distress

Pathways - Chapter 11 and Adminsitration ■ General application and founding jurisdiction ■ Procedure & voting thresholds ■ Key benefits

• Automatic stay - Worldwide impact (practical application)

• Cherry picking contracts• Assets sales• DIP funding• Cram-downs and Cram–ins

■ Review of Truvo ■ Administration & pre-packs ■ Review ATU “flip-up” case

Case Review: CGG Restructuring US and French options

Other problem areas in Bond restructurings ■ CoMi & Jurisdiction issues ■ Organising the Bondholders

• Relationship between the issuer, trustee and bondholders

• Identifying the Bondholders – difficulties and tactics

• Standstill Agreements• Lockup Agreements• Reporting requirements• Obtaining information – problem areas

■ Insider dealing, Fraud and other issues • US anti-fraud• UK & EU rules and regulations

■ Impact of CDS on restructuring• How it matters q.v. Truvo

Stabilization & liquidity ■ Standstills re the Issuing Group – positive and

negative ■ Liquidity – the options and requirements

• New shareholder funding• Payment extension and deferment techniques• New debt incurrence via the HY indenture –

sources and problems• Take-outs • Review of Towergate solution for liquidity

■ Issues affecting junior Notes / mezz etc• Standstills (on junior Noteholders and other

creditors)• Payment Stop notices

Draft EU Harmonisation Directive on restructuring ■ Backgorund ■ The three minimum key elements ■ Review of the Key principles ■ Relevance of Brexit


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Corporate Restructuring - Tax IssuesDates TBD

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Location: London Price: £350 +VAT Membership Price: £280 + VAT

This course introduces delegates to the strategies that might need to be adopted where the split of a company is required in preparation for a business sale (either to the management or to third parties), or prior to a flotation.

Other reasons for the demerger or reconstruction can include: ■ to resolve a dispute between shareholders wishing to go their separate ways ■ to protect a group’s trading company status ■ to facilitate succession planning ■ to bring real estate currently held within a company into the personal ownership of the share-

holders

The course will also look at share buy-backs, which can be used to buy out a retiring or dissentient shareholder.

It is desirable (but not essential) that delegates have a sound understanding of the basic principles of company and shareholder taxation.

Hiving down the target trade ■ Tax reliefs available on a transfer of trade

within a group ■ Protecting losses when transferring the

target trade into a “clean” Newco ■ Capital gains implications

• Including use of the substantial share-holding exemption

■ Stamp duty land tax implications ■ Key cases and problem areas

Demergers ■ Statutory demergers, Liquidation demerg-

ers and capital reduction demergers• Circumstances when each is appropri-

ate• Capital gains implications• Stamp duty implications• Clearance procedures and problem

areas• Practical examples and case studies

Share buy-backs ■ Using the purchase of own shares rules to

buy out shareholders ■ Conditions to obtain CGT treatment ■ Problem areas ■ Why a buy-out is often preferable in suc-

cession planning• Case study




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ForbearanceIn-house or via Live Webinar

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BackgroundThe global commodity crisis in general and the widespread challenges in some economies in particular have placed the finances of many economies under considerable strain. One of the earliest casualties of these twin pressures is the ability of people at all levels in the economy to meet their commitments on time. The cries of “Can’t pay? Wont pay?” were last heard in the early nineties but will be back soon. Since then, automated debt recovery systems have become the norm but in a deep recession the computer’s inability to say “maybe, tell me more” can be a major obstacle to achieving significant levels of recoveries.

Banking/lending is and always has been a people business and whilst automation is here to stay – and has a major role – it is not the only and certainly not always the best method of persuading people to meet their obligations. The modern recoveries manager needs to employ the right balance between old fashioned collection methods and automation if he is to achieve the best returns in practice. Knowing what to do and when, is the key.

Course ObjectivesThis course is designed to provide Heads of Departments and senior staff the key skills that they require to manage the Forbearance process. The emphasis is on the practical as well as the theoretical with numerous examples and case studies throughout the course as well as in depth discussions so that delegates can pool their experiences and learn from both mistakes and successes.

Who Should Attend ■ Heads or Mangers in Recoveries ■ All senior and support staff involved in recoveries ■ Heads and Managers of consumer/personal finance

MethodologyClassroom style presentations using numerous case studies and practical examples as well as group discussions.

Knowledge Pre-RequisitesSome knowledge of bank lending and debt recovery systems would be an advantage but is not essential. The content of the course can and will be tailored to meet the needs and experience within each delegate group e.g. corporate, retail, consumer lending or all three!.

Session 1: Introduction ■ Lending refresher ■ What goes wrong and how to spot and pre-

vent it ■ Timing ■ Strategies, planning and procedures ■ Loan Modification ■ Management & monitoring systems

Session 2: What is Forbearance ■ Definitions – usually a short term relief

measure ■ Reduction or suspension of mortgage pay-

ments ■ Time periods ■ Agreement not to foreclose during forbearance

period ■ Resumption dates ■ Catch up arrangements

Case Study/Exercise: Several of each throughout the session

Session 3: Forbearance Documentation Requirements ■ Drafting the agreement ■ Waiving existing defaults


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ForbearanceContinued

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■ Borrower representations & warranties ■ Strict compliance with loan documents ■ Expiration date and early termination ■ Fees ■ Ratification of obligations ■ Confirmation of security interests ■ Release of claims ■ Arrangements after forbearance period ■ Catch up process

Case Study/Exercise: Several of each throughout the session

Session 4: EU Requirements ■ Main framework ■ Specific requirements

Session 5: When to give up ■ Basic considerations ■ Risk/reward ■ The dangers of personalising the process ■ Signs that it is hopeless ■ Public/moral duty versus cost ■ Recording write offs ■ Managing write offs ■ The role of external agencies

Session 6: Putting it all together ■ The group will discuss, implement and con-

sider the process based on examples.

END


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Modelling for Debt RestructuringIn-house or via Live Webinar

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This two day workshop explores:

■ Spreadsheet best practice ■ Building a flexible model in stages ■ Forecasts and financial analysis ■ Restructuring debt ■ Adding management reporting

The programme is taught using a mixture of instruction, demonstrations and practical exercises. The workshop emphasis concentrates on the application of financial theory to Excel to produce a flexible and informative model.

Each session consists of theory, demonstrations and a practical exercise as participants develop the model in stages. The template for each session acts shows the solution to the previous session.

Comprehensive product notes will be provided to all participants. Participants receive a full pack of Excel software and templates for future reference as part of the course materials.

What participants will gain:

■ Principles of spreadsheet best practice ■ Application of best practice principles to a restructuring model ■ How to understand the financial reports ■ Methods to forecast and restructure debt ■ How to report and use the model

Each participant will be required to bring a laptop with an available USB running Microsoft Office to the seminar.

Day One

Case Study Outline

■ Analysis framework ■ Reasons for financial distress ■ Current data ■ Case study outline ■ Model objectives ■ Systematic Design Method ■ Basics of spreadsheet design ■ Modelling ‘rules’ ■ Common spreadsheet errors

Exercise: starting a model template

Historic Statements

■ Modelling initial accounts ■ Income and balance sheet ■ Generating cash flow

Exercise: adding and checking accounting statements


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Modelling for Debt RestructuringContinued

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Historic Analysis

■ Identifying existing debt ■ Calculating forward debt repayments and

current balance ■ Calculating debt and other ratios ■ Bankruptcy ratios and scores

Exercise: adding loan sheets and calculating ratios

Forecast Accounts

■ Forecast accounts ■ Time lines and flags ■ Sales growth ■ Cost base ■ CAPEX requirements ■ Working capital – stock, receivables, paya-

bles ■ Integrity checks ■ Circular references

Exercise: completing initial forecast statements

Day Two

New Loans

■ Excel functions ■ Calculating new loans ■ Rate, profile and timing ■ Amortisation profiles ■ Incorporating scenarios

Exercise: calculating new loans and repayment profiles

Completing Forecast Accounts

■ Incorporating new loans ■ Balancing the accounts ■ Checking on requirements for further capital ■ Recalculating forward ratios ■ Computing forward default scores ■ Integrity checks on results

Exercise: adding loans to forecast statements and checking cash position

Model Stress Testing

■ Constructing forward scenarios ■ What-if and downside analysis ■ Optimising the model results ■ Assessing the importance of individual fac-

tors

Exercise: layering stress testing on the initial model

Model Completion

■ Version control ■ Documentation ■ Chart output ■ Dynamic dashboards ■ Management summaries

Exercise: model completion and final checks


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Restructuring, Turnarounds & Schemes of ArrangementIn-house or via Live Webinar

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Restructuring covers a broad range of situations which many firms in Europe will experience at some stage. There are often occasions when the group’s financial performance goes unrewarded by the markets and the sum-of-the parts is greater than the whole (the classic Racal /Vodafone demerger) and this leads to the need to consider a restructuring in order to enhance shareholder value. On other occasions, a restructuring is necessitated by strategic issues (BA/ Go). Thirdly, restructurings take place because a group is in financial difficulties and the implementation of the transaction is intended to achieve a “turnaround” in the group’s fortunes.

Restructuring (or reorganisation – the terms are often used interchangeably) can be effected in a wide variety of ways: both formally, in court, or less formally, out-of-court. Additionally there are a wide range of methods in which this can be effected but in Europe, unlike the USA, much of the restructuring is done informally.

One of the tools which is assuming increasing importance not only in the UK but also in Europe and further afield is the scheme of arrangement procedure under the UK Companies Act. Despite this, schemes are been used increasingly by non-UK firms to restructure firms in Germany (Rodenstock, Telecolumbus, PrimaCom), Spain (Cortefiel, Metrovacesa, Re La Seda de Barcelona), Italy (Seat), Holland / Bulgaria (Vivacom) and even the Gulf (GIC) and the recent landmark Vietnam (Vinashin) case.

Although some jurisdictions have sought to implement similar legislation (e.g. Spain), the lack of precedents coupled with the enormous flexibility offered by schemes, makes it likely that, for the medium term, UK schemes will retain their attractions to foreign firms.

This programme reviews the key issues of schemes and their use and application together with the problem areas (for example, class and value).

Last, the programme, covers restructuring in a turnaround situation, as that often involves issues not relevant in happier circumstances. In particular it provides a template of the four key issues to consider.

Restructuring

■ Restructuring vs reorganisations ■ Ten tips for restructuring professionals ■ Reasons for restructuring &/or reorganiza-

tions• Financial / operational difficulties• M&A• Unlock or enhance value • Other reasons – strategic, regulatory, tax,

efficiency ■ Internal reorganisations – specific issues

• The valuation conundrum (review of rele-vant cases law)

Demergers

■ Demergers generally - six good reasons for demerging • Review of selected examples (Cookson,

Punch Taverns, Anglo American, BT, BAT)•

■ Types of demergers & demerger procedures• Direct dividend• Indirect or three-cornered demerger• Indirect or three-cornered reduction of

capital• Scheme of arrangement

■ Liquidation scheme under §110 of the Insol-vency Act (UK only)


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Restructuring, Turnarounds & Schemes of ArrangementContinued

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• Overview – use and application• Typical structure• Pros & cons

■ Factors affecting choice of demerger meth-od & structure

Restructuring the equity

■ What are the options? ■ Spin-offs vs split –off vs carve-outs ■ Review of the epic Vodafone / Racal de-

merger – how 2 + 2 = 6! ■ Specific situations

• IPO• Sale of subsidiary

■ Using schemes for public take-overs• Take-overs & squeeze-out• Dealing with foreign shareholders

■ Key considerations• How much should be sold & how much

kept• How much new vs old money• What about the debt (BT / O2)

Schemes of arrangement generally

■ What is a scheme of arrangement? ■ Use and application of schemes

• Restructuring & cram-downs• Reorganisations• M&A• Demergers• Squeeze-outs / dealing with minorities• Return of capital• Aspects affecting loans – amend & ex-

tend (Barcelona de Seda, Cortefiel) ■ Requirements for schemes & problem areas

• Who can implement a scheme?• What’s in a class?• The voting thresholds• Fair treatment and the lessons from the

Assenagon case• Lessons from IMO Carwash (Bluebrook)

case re valuation

Schemes of arrangement – International application (foreign companies)

■ The international dimension – recognition of Schemes for foreign companies

■ Use of schemes for non UK companies ■ Recent examples

• German Schemes - Rodenstock, Teleco-lumbus, PrimaCom

• Vivacom / Bulgarian Telecom Scheme (Holland / Bulgaria)

• Other cases - Seat (Italy), GIC (Kuwait)• Vinashin and why it may be a game

changer

Turnarounds

■ The 3 phases of decline and fall ■ Smoke signals of declining performance ■ Warning signs of financial distress ■ Red alert – signs of a financial crisis ■ There are only 3 options in financial distress!

Fix, Sell, Shut ■ A template for managing a crisis: the 4 key

issues ■ Key issues for main players (especially when

the firm enters the “zone of insolvency’)• Existing management – should they stay

or go?• New management – are they required and

what to look for?• What about secured lenders – any more

support?• What about the other creditors?

■ Who else has leverage & how to handle them?

■ What about a chief restructuring officer – help or hindrance?

■ What’s the cash burn-rate?


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Distressed Disposals: Key Negotiating AspectsIn-house or via Live Webinar

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Course Overview

Companies facing financial difficulties face three options: flog, fix or fail (close). Often a restructuring will involve a mixture of both debt restructuring accompanied by a sale of part or, occasionally, all of the business. M&A is a challenging process in normal conditions; however, selling a business in a distressed scenario is fraught with difficulty and presents a raft of challenges over and above a sale in the ordinary course. In an ideal world the sellers will seek to execute a sale outside and before any formal insolvency process (Administration) however, in some cases this may not be possible. The programme focuses on the challenges of selling a business both before the imposition of a formal insolvency process and also after Administration via a pre-packages sale. Interestingly pre-packs have been used in jurisdictions other than the UK; namely Holland, Luxembourg and Germany.

This programme aims to identify the typical issues which parties are likely to encounter in the process and provides a route map on how these might be resolved. The programme adopts a generic approach which is relevant to stakeholders who may have an interest in these types of transactions including; lawyers, financial advisers, senior and junior lenders, accountants and owners.

The problems typically include the nature of the sale process, the structure of the deal and the manner in which the consideration is to be paid (deferred methods are unattractive at best). For the buyer problems arise through the absence of warranties coupled with the limited due diligence which is conducted owing to timing pressures.

In addition, the sale is also open to a number of additional impediments not present in more normal circumstances; attempts by (competing/trade) buyers to wind down the clock, difficulties with valuing the target if that is itself distressed, the ever-present risk of Directors’ fiduciary duties which become more relevant in distress.

Initial considerations in accelerated/distressed disposals

■ Background issues ■ Target’s situation

• Distressed seller• Distressed target

■ Exploring the Seller’s options – to mitigate risk• Dual / triple track approach: sale, equity

injection, debt restructuring ■ Summary of key differences to “non-dis-

tressed” M&A• Deal structure• Tax• Key contracts – mitigating termination risk• Pensions/ Employees• Claw-back risk

Valuation issues and risk for Directors

■ Importance of the valuation• Special considerations in distress • Establishing the value of the Target (the

fulcrum capital vis-à-vis other stakeholders)• Due diligence issues

■ Issues for the (Sellers’) Directors• Fiduciary duties• Summary of position in key European juris-

dictions (Sweden, Norway, France, Germa-ny, Lux, Spain)

■ Key risks• Vulnerable transactions• Transactions at an Undervalue• Preferences• Review of position in key European jurisdic-

tions ■ Steps to mitigate risk & subsequent challenges

by Liquidators post Formal Insolvency


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Distressed Disposals: Key Negotiating AspectsContinued

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Other impediments / considerations in re Stake-holder issues

■ Issues arising from the Senior Secured lenders - issues affecting the sale• Structure of the loan• Syndicated/Club deal - issues• Bilateral loan - issues

■ Impact of the Junior Secured lenders• Critical issues In the Inter-creditor • Where to focus -release of collateral con-

trol over the agent ■ Junior-Unsecured Lenders – limited lever-

age available ■ Getting Bond-holders’ approval – key issues

• Who are they• Co-ordinating action• Exit consents – dealing with hold-outs• Market Abuse Directive issues

■ Shareholders• Issues with split shareholdings• Dealing with Management

■ Other key stake-holders – tactics for man-aging• Landlords• Aggressive creditors

■ Special considerations for Listed Companies• Disclosure• Approvals• Market Abuse Directive issues

■ Employee Rights / Issues • EU Acquired Rights Directive & TUPE• Pension matters

■ Regulatory / Competition Authority issues

Structuring the Deal

■ The Purchaser’s perspective & approach • Structure of the deal

■ Seller issues & preferences• Structure of the deal – issues favouring a

share purchase• Issues favouring an asset purchase

■ Sale process - methods• Traditional auction• Mini-auction• Accelerated/ fast-track auction• Sealed bids / tender• Stalking horse method

■ Special considerations for distressed sales• Managing the bidders• Dealing with competitors – key role of

confidentiality• Tactics for avoiding value destruction

■ Structuring the deal methods• Shares vs Assets• Hive-downs• Schemes of Arrangement (apply to non-

UK companies with UK connection)

• Acquiring control via a loan-to-own ■ Methods of structuring the Consideration –

pros & cons• Cash • Deferred consideration• Other methods of closing the value gap

Special considerations for Insolvent / distressed sales

■ Insolvency practitioners’ locus standi ■ Warranties & Indemnities – the value gap ■ Warranty Insurance, Escrow Accounts ■ Transitional Service Agreements

• Key features• How they can help – pros & cons• Seller issues• Buyer issues

■ Asset sales• Identification of assets• Delivery of assets

■ Third Party Agreements• Customers & supplier issues• Leased Plant & Equipment• Leased premises• Licences• Inventory – retention of title• Book debts• Real property

Pre-packaged sales in UK & some European Jurisdictions

■ Sale under formal Insolvency process –con-trasted with non-insolvency sales

■ Pre-packaged sales generally• What are they• How are they achieved• Where can they be used• Pre-packages sales in UK • Pre-packaged sales in Europe (Lux, Hol-

land, Germany) ■ Five advantages of using pre-packs ■ Disadvantages of pre-packs ■ Types of pre-packs / mechanics of the pro-

cess• Operational• Financial


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Advanced Negotiation Issues & Trends in Restructuring

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The programme will review the impact of the draft ECB guidance on leveraged transactions.

The course is aimed at lenders, sponsors, lawyers, accountants and other advisers involved in this sector, management and other professions (investment advisers) operating in the European environment who require a greater insight into the key issues which arise in financial restructurings. The course will also discuss briefly the potential impact of Brexit on existing and new documentation.

This course explores the negotiating levers which various parties can use to obtain a seat at the negotiating table together with the restructuring methods, solutions, techniques and tactics for managing all the players as well as the practical issues which will face parties in leveraged and unleveraged deals and, drawing on the trainer’s experience, offers a practical template on how to respond to the issues they are likely to face. The programme will also review the key points of the Draft EU Directive harmonising restructuring and insolvency matters published on 22nd November 2016.

■

Participants will:

■ Have explained to them the restructuring route map, examining the numerous steps and op-tions

■ Learn about how to get a seat at the negotiating table – tools and techniques ■ Consider schemes of arrangement – their relevance and how they work ■ Be taught about pre-packs and their use in the UK and elsewhere in Europe ■ Master restructuring techniques under U.S pathways ■ Get to grips with (i) debt for debt and (ii) debt for equity swaps ■ Gain an appreciation of issues specific to syndicated / laminated deals ■ Gain an understanding of the likely impact of Brexit ■ Be appraised of the importance of the draft EU Harmonisation Directive on Restructuring

Course Objectives

In-house or via Live Webinar


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Advanced Negotiation Issues & Trends in RestructuringContinued...

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Course Content

Restructuring routemap: 6 steps, 10 options

■ The Restructuring route-map – 6 key steps ■ Ten key options for restructuring ■ Overview – Restructuring methods

• Out of court approach• Scheme of Arrangements generally• UK tools – Administration & CVAs (avail-

ability to non-UK firms)• Prepacks – availability in UK, the Conti-

nent • Chapter 11 (USA)

Getting a seat at the negotiating table – tools and techniques

■ Levers for Senior secured lenders (pre-de-fault & post default)

■ Levers for Junior secured lenders (pre-de-fault & post default)

■ Levers for unsecured junior lenders ■ Lessons from European Directories & other

key cases ■ Levers for unsecured (trade) creditors ■ Levers for equity holders (Management and

PE)

Valuation issues

■ Why valuation matters ■ Theoretical approach – why & where it’s

wrong ■ Landmark cases (IMO & Stabilus) where

they went wrong…and right ■ A more practical approach to valuation

Schemes of Arrangement

■ Jurisdiction – Application to foreign compa-nies/jurisdictions• Application to Foreign companies – Ger-

many (Rodenstock, Apcoa), Spain (Cor-tefiel), Holland (Magyar Telecom)

■ EU Judgements Regulation – founding juris-diction in England• Art 8 (how many creditors must be in

England) review of relevant cases• Art 25 (the English jurisdiction clause)

relevant cases on problem areas ■ Different types of creditor Schemes

• Secured Debt transfer (IMO)• Unsecured debt transfer (e.g. MyTravel,

Cattles)• Minorities scheme

■ Specific issues in Schemes• Typical creditor groups

• Can Schemes bind claims of secured cred-itors?

• Impact on Inter-creditor rights and obliga-tions

• Moratoria pending sanction of a scheme (q.v. Vinashin)

• Issue affecting “Class” – Collateral rights vs interests

• Who are the “Creditors” & what happens if they wear two hats (relevant cases)

• What about fees• Using the appropriate “Comparator”

Pre-packs, Administration and CVS – UK and Europe

■ Administration – general overview pros & cons

■ CVAs – general overview pros & cons ■ UK Pre-packs generally – use and abuse

• Operational pre-pack• Purpose of a pre-pack • Impact on key stakeholders

■ Availability in selected countries on the Con-tinent• France (Autodistribution case)• Netherlands (Schoeller Arca case)• Germany (Schutzschirmverfahren + Insol-

vency Plan)• Spain (Spanish Insolvency Act 2011)

Case Study: Review of McCarthy & Stone (Pre-packaged Administration & Schemes)

Restructuring under U.S pathways

■ Chapter 11 and Chapter 15• What is the gal of Chapter 11

■ Aspects of Chapter 11• General application and founding jurisdic-

tion• Procedure, Timing • Automatic stay - Worldwide impact (practi-

cal application)• Cherry picking contracts• §363 Asset Aales• DIP funding• Role of Management

■ The Chapter 11 Plan • Classes & voting (who votes who doesn’t)• Requirements for Craming-down

■ Cram–up• Rationale & application• Examples in practice

■ Other restructuring options in the U.S.• Pre-packs• Pre-arranged plan


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To book this course or find out more, please click the “ENQUIRE” button

Advanced Negotiation Issues & Trends in RestructuringContinued...

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Course Content

Restructuring routemap: 6 steps, 10 options

■ The Restructuring route-map – 6 key steps ■ Ten key options for restructuring ■ Overview – Restructuring methods

• Out of court approach• Scheme of Arrangements generally• UK tools – Administration & CVAs (avail-

ability to non-UK firms)• Prepacks – availability in UK, the Conti-

nent • Chapter 11 (USA)

Getting a seat at the negotiating table – tools and techniques

■ Levers for Senior secured lenders (pre-de-fault & post default)

■ Levers for Junior secured lenders (pre-de-fault & post default)

■ Levers for unsecured junior lenders ■ Lessons from European Directories & other

key cases ■ Levers for unsecured (trade) creditors ■ Levers for equity holders (Management and

PE)

Valuation issues

■ Why valuation matters ■ Theoretical approach – why & where it’s

wrong ■ Landmark cases (IMO & Stabilus) where

they went wrong…and right ■ A more practical approach to valuation

Schemes of Arrangement

■ Jurisdiction – Application to foreign compa-nies/jurisdictions• Application to Foreign companies – Ger-

many (Rodenstock, Apcoa), Spain (Cor-tefiel), Holland (Magyar Telecom)

■ EU Judgements Regulation – founding juris-diction in England• Art 8 (how many creditors must be in

England) review of relevant cases• Art 25 (the English jurisdiction clause)

relevant cases on problem areas ■ Different types of creditor Schemes

• Secured Debt transfer (IMO)• Unsecured debt transfer (e.g. MyTravel,

Cattles)• Minorities scheme

■ Specific issues in Schemes• Typical creditor groups• Can Schemes bind claims of secured

creditors?• Impact on Inter-creditor rights and obliga-

tions• Moratoria pending sanction of a scheme

(q.v. Vinashin)• Issue affecting “Class” – Collateral rights

vs interests • Who are the “Creditors” & what happens if

they wear two hats (relevant cases)• What about fees• Using the appropriate “Comparator”

Pre-packs, Administration and CVS – UK and Europe

■ Administration – general overview pros & cons

■ CVAs – general overview pros & cons ■ UK Pre-packs generally – use and abuse

• Operational pre-pack• Purpose of a pre-pack • Impact on key stakeholders

■ Availability in selected countries on the Con-tinent• France (Autodistribution case)• Netherlands (Schoeller Arca case)• Germany (Schutzschirmverfahren + Insol-

vency Plan)• Spain (Spanish Insolvency Act 2011)

Case Study: Review of McCarthy & Stone (Pre-packaged Administration & Schemes)

Restructuring under U.S pathways

■ Chapter 11 and Chapter 15• What is the gal of Chapter 11

■ Aspects of Chapter 11• General application and founding jurisdic-

tion• Procedure, Timing • Automatic stay - Worldwide impact (practi-

cal application)• Cherry picking contracts• §363 Asset Aales• DIP funding• Role of Management

■ The Chapter 11 Plan • Classes & voting (who votes who doesn’t)• Requirements for Craming-down

■ Cram–up• Rationale & application• Examples in practice

■ Other restructuring options in the U.S.• Pre-packs• Pre-arranged plan• Out-of-court workouts


http://redcliffetraining.com/training/corporate-restructuring-training-courses/modelling-restructuring-2-day-programme/




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Corporate & Debt Restructuring Business Valuation Courses … · 2019-11-26 · The specialist in highly technical, market-driven banking and corporate finance training Business Valuation