Restructuring

Company / Management

When a company can no longer meet its credit obligations on a permanent basis or no longer receive refinancing on the open market, a financial restructuring becomes necessary. In such a crisis, the stakeholders of a company divide themselves into different interest groups. Owners, management, employees, banks, and others pursue all different goals. The organization of such a process and finding the path to a mutually feasible way is a very complex task at that stage, which sometimes is made even more difficult by mutual mistrust and typically very short time available before certain trigger events lead to insolvency.

Precisely in such cases, Herter & Co has specialized in advising companies and management and offers the following services, among others:

• covenant waivers, covenant resets, amendments or term extensions
• development of restructuring and insolvency strategies
• organization of the entire process
• negotiations with lenders and creditor groups
• validation and preparation of financial data
• validation of a resilient business plan from the lender’s point of view
• business valuation
• collateral valuation in continuation and liquidation scenarios
• determination of indebtedness
• development of a new financing concept

Herter &Co. supports the organization of the overall process and in particular negotiations between the company and its lenders. This relieves the pressure on management in such a tense situation. The long-standing contacts to all major banking teams in Germany and to relevant credit investors in London help in this respect.
A financing concept that is feasible for all sides must be developed and negotiated on the basis of a resilient business plan. This includes the consideration of the initial legal position, a company valuation, the determination of the debt capability, the selection of appropriate financial instruments and the establishment of an appropriate capital structure. Herter & Co. takes care of these components as well as finding new investors (if appropriate).
The many years of experience in significant transactions and the success of the Herter & Co. team in this field help the company and its management to successfully handle this difficult phase.

Banks and lenders

In addition to Herter & Co.’s focus on advising companies and management teams, the company also has experience in advising lenders.
Creditor groups have grown in size and complexity in the past years. Their way of handling can sometimes differ. But even within the same creditor group, controversial positions can sometimes arise due to different objectives and strategies. This may be due, for example, to financing at different levels of a company or group, different collateral packages or credit instruments, differing credit size, subordination agreements, different nationalities or fundamentally different intentions (e.g. of hedge funds).
Herter & Co. can help to harmonize the interests of the creditor group and to represent them externally. This includes the organization of its own creditor group, the development of an optimal restructuring solution for this group and the negotiation of this solution with other restructuring stakeholders.
From the point of view of the lenders and on the basis of a resilient corporate plan, the restructuring project must include a company evaluation, the eligibility to refund existing debt and the greatest possible recovery of the existing loans.