The COVID-19 crisis has forced many businesses to adapt. However, some sectors such as hospitality may be forced to take drastic measures, given the looming negative outlook for global growth. Companies who find themselves in these financially distressed situations can consider the option of Corporate Recovery.
Corporate Recovery is the process of ensuring owners, creditors, suppliers and employees get the best possible outcome. Depending on the degree of financial distress, Corporate Recovery could result in business rehabilitation or business liquidation.
In this article, you will see the three useful services that can help you deal with your financial situation effectively and in an orderly fashion.
a. Corporate Restructuring: Informal Turnaround
Corporate restructuring in the form of informal turnaround is a voluntarily negotiated agreement between creditors and the business. Unlike formal proceedings that are public to everyone and the media, this process is private and thus it is advantageous to businesses.
b. Corporate Restructuring: Formal Proposal to Creditors
As mentioned, formal proposals are public. Businesses can get creditor protection by filing a formal proposal.
c. Business Review
The business review provides a detailed analysis of an organisation’s current financial status and prospects. The review also analyses the priorities and status of both secured and unsecured creditors. A business review is the first step to a corporate recovery in Indonesia to achieve a mutual agreement between a secured lender and a company.
When there are no effective solutions for a company’s debt, the company can seek the last resort – filing for bankruptcy. Filing for bankruptcy can help prevent further losses for shareholders and creditors.
a. Appointment Monitoring
During the process of a turnaround, a company can engage a professional in corporate recovery in Indonesia to act on behalf of a secured creditor by serving as a monitor.
To decrease the burden a company would possibly encounter from stakeholders, the monitor will analyse the operating results and then present the secured creditor with the most updated reports and information.
b. Business Review
A company’s primary secured lender can request a corporate recovery provider to review the organisation’s current financial status and prospects.
The review also analyses the priorities and status of both secured and unsecured creditors. A business review is the first step to a corporate recovery in Indonesia to achieve a mutual agreement between a secured lender and a company.
c. Interim Receiver
The Court may get an interim receiver when a company’s assets or a creditor’s security is at risk. An interim receiver can exercise control on and take possession of assets of the company, as well as its operations when deemed reasonable.
Receivership can help protect or liquidate creditors’ assets which they hold as collateral, as well as dealing with operations and the sale of the business.
Creditor(s) may file for court-ordered bankruptcy when a company will not proceed with bankruptcy voluntarily.
A provider of corporate recovery in Indonesia can also mediate the dispute process when a business relationship goes sour.
b. Deceased Estates’ Corporate Executor
When a business’s principal has passed away with no identified successor to manage operations, a corporate recovery specialist can assist in the operation management until the company resolves the issue.
According to HSBC’s Global Research, Asia continues to see inflows of Foreign Direct Investment, even as the rest of the world sees a decline. This can be seen as a signal that both local and global companies continue to look for structural opportunities to invest in for the long term.
Inaction is a risky approach to managing your business. To build a COVID-resilient business plan, contact the relevant team below to explore your options with us.
Cekindo is one of the leading bodies for corporate recovery in Indonesia. Through our skilled professional and global network, we can rapidly deploy a full range of business restructuring services for your underperforming or troubled business.
Through the years, our professional team has helped clients quickly identify issues, come up with viable solutions, and materialise them with precision and sensitivity.