In the current market scenario, Business Restructuring Services (BRS) is significant for the following reasons:
Indian promoters averse to equity dilution: Most companies in India are family-run promoter-driven businesses that create a demand for effective debt raising and succession planning. Today, most family businesses are moving towards corporate restructuring to increase firm valuation and build on core competency. Capitalisation of internal capital and fund utilisation within the group still remains a key challenge for Indian family-run conglomerates.
Lacklustre equity markets and increasing NPAs making raising capital tougher: Optimal and flexible debt and equity capital structures and competitive financing programmes are key to growth in a difficult economy. Tough debt markets and bank financing are forcing businesses to refinance and consider alternate structures for raising capital. Increased NPAs and RBI regulations are forcing debt restructuring.
Increase in distressed assets and renewed impetus for asset reconstruction companies: Regulatory initiatives have encouraged investments in distressed assets. As a result, a large pool of distressed asset funds and asset reconstruction companies has surfaced. The RBI has also proposed norms allowing leveraged buyouts for the acquisition of distressed companies, to further enhance investment around them.
Tightened loan restructuring norms: With the RBI's norms on provisioning and restructuring, banks's sanctioning and monitoring mechanisms are stricter. Consequently, the need to better manage the loan portfolio and to resort to independent expertise on turnaround or operational improvement has assumed even greater significance.
PwC's BRS will provide holistic solutions in the following areas:
Debt and capital financing options, stressed asset advisory and creditor advisory
Business restructuring, debt restructuring and turnaround strategies