MSI Financial Restructuring & Recovery (*MFRR) consists of a group of highly specialized senior bankers who advise/guide and represent Dutch and German Corporate Banks outside its borders.
If depressed financial results cause a significant increase in the credit risk, MFRR will become involved. Services rendered consist of: i) “Restructuring”, which focuses on restructuring and preserving the relationship with the client and ii) “Termination”, which cancels the credit relationship and ends the relationship with the client.
Taking information provided by the company and other sources, MFFR will use the warning signs and the underlying causes to analyze how much the credit risk has increased, and in what way, and what the likelihood is that the credit will need to be written off. A key question is how realistic the company’s prospects are. To answer that question, the company will need to present a restructuring plan.
To safeguard its operations, the company will generally need additional credit, combined with a deferment of its repayment obligations. In these situations, MFRR will advise the bank in question, to agree to continue or expand the credit (even temporarily) on strict terms. In this circumstance, employees of MFRR will be appointed as chief restructuring officer (CRO).
If the current situation and the outlook are so bleak, however, that insolvency becomes inevitable and restructuring no longer offers a way out, the company’s portfolio will be handed over to the Termination unit.
If a credit agreement is cancelled, MFRR will make arrangements about repaying the debt to the bank. This involves preparing exit scenarios, a timetable for taking out new credit elsewhere, private sales of assets on which the bank has established security, how the credit should be used (if applicable), the terms on which a bank will agree to relinquish its security rights and (in extreme cases) public sales of the security.
MFRR has an international network of highly specialized senior legal advisers and lawyers to assist Dutch and German banks locally. It can also mediate in alternative financing solutions.
*MFRR is a business unit which is part of the MSI Group of Companies (intra group transfer).