FINANCES

Debt restructuring and refinancing

The Companies, after the new «Economic-business environment caused by the COVID-19 crisis» may be doomed to one of these situations:

Treasury tensions or immediate liquidity problems.
Actual or potential breach of covenants.
Deterioration of credit ratings or ratings.
Difficulties in meeting debt payments.
Excess debt in relation to sustainable cash generation capacity.
Need to reduce your financial costs.

If your company is in any of these situations, it is likely that your company requires a debt restructuring or refinancing solution.

From BGOgrupo we offer you the different solutions to your debt challenges

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Debt refinancing

Refinancing is intended to replace an existing loan with a new loan. It is refinanced to obtain more favorable conditions, either with lower interest rates or with additional funds

The reasons that can lead a company to refinance the debt can be:

Cancel a loan to which the company is already a debtor, obtaining better conditions
Debt consolidation or obtaining a new loan that combines or covers the different loans that the company has.
Obtaining a single reduced monthly debt payment, lengthening the debt payment period
Changing the structure of loans to free up cash
The cash needs at a given time or the increase in operating fund needs.
The risk of default on the promised payments that the company notices

Companies with good results and sufficient cash flow also refinance their debt, to reduce their financial cost.

Debt refinancing are complex processes that require qualified professionals with proven knowledge and experience in this field.

Restructuring the debt means negotiating the modification of the loan contract or other existing financing instrument, generally to extend the due date for the payment of the principal or to modify the frequencies of interest payments.

Restructuring is usually associated with short-term cash stress situations. The causes may be temporary or derive from the lack of obtaining financing from working capital.

Restructuring involves changing the terms of existing loans.

The purpose is to agree on new amortization schedules and conditions more in line with the existing situation to avoid financial insolvency. It is about passing the obligations from short to long term.

Having reached this situation, financial, strategic and operational aspects of the business have to be evaluated, without forgetting the legal and tax issues and implications that must be taken into account in this type of process.

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Debt reestructuring

Methodology

PHASE 1

Initial Financial Diagnosis

At first, the most important thing is to know what the real situation of the company is and assess the different feasibility options, for this we carry out a thorough diagnosis of the company.

PHASE 2

Preparation of the Debt Restructuring and Refinancing Plan

Once the real situation of the company is known, we prepare a Restructuring / Refinancing Plan for the company, which consists of a roadmap of the actions to be undertaken by the company.

PHASE 3

Debt Restructuring and Refinancing Action Plan

We execute, together with the company management, the actions that have been pre-established in the debt restructuring plan.

PHASE 4

Formalization and Monitoring Plan

We will carry out the evaluation and monitoring of all the actions that have been established in the Company’s debt restructuring and refinancing Plan, to verify its correct application, as well as the corresponding formalizations of the New Financial Structure negotiated with the Financial System. , Commercial Suppliers and Creditors in general.

Equipment and added value

At BGOgrupo we have a multidisciplinary team that works to provide our clients with the comprehensive specialized knowledge they need.

The BGOgrupo team of professionals has extensive experience and knowledge, which allows it to deal with the management of these types of situations in a realistic, agile and effective way.

Combining our debt restructuring and refinancing skills with functional and industry knowledge, we support organizations in a wide range of areas.

Our approach to work and added value

Our job is to understand, advise and resolve complex situations associated with debt restructuring and refinancing processes, in order to find an optimal solution, taking into account the circumstances and needs of each case.

At BGO grupo we help management teams, shareholders, financial institutions and other creditors to define a solid platform for debt restructuring and refinancing in order to re-establish trust in the company, adding value in all phases of the process and establishing information channels between interested parties.