Category: Merger & Acquisition

Corporate Debt Restructuring- Strategies under Indian Legal Regime

Corporate Debt Restructuring (CDR) mechanism is a voluntary non statutory mechanism under which financial institutions and banks come together to restructure the debt of companies facing financial difficulties due to internal or external factors, in order to provide timely support to such companies. The intention behind the mechanism is to revive such companies and also safeguard the interests of the lending institutions and other stakeholders. The CDR mechanism is available to companies who enjoy credit facilities from more than one lending institution. The mechanism allows such institutions, to restructure the debt in a speedy and transparent manner for the benefit of al

While it has proved to be fruitful in many cases, still there is a lot of scope for improvement. Various issues arise such as foreign lender’s reluctance to be a part of the CDR process along with Indian banks, because they feel that the process is more favourable to Indian lenders and could be misused by sertain entities. The analysis shows that many restructured cases turn into bad assets over a period of time. A thrust area which needs a further look-in is the post-restructuring phase which demands heavy monitoring.

Corporate Debt Restructuring-Strategies In The Indian Legal Regime

By Amrit Subhadarsi, KIIT School of Law, Bhuvaneshwar “EDITOR’S NOTE:- In this era of corporate governance reforms, it has become imperative for the Indian financial institutions to re-examine the existing methods of restructuring the companies that incur losses and are unable to function to their optimum capacity. Corporate debt restructuring […]