In parallel to its strategic planning services, AlShall advises on financial architecture and restructuring of troubled companies. With the aim of enhancing shareholder value, AlShall focuses on the client’s goals and provides advice on the optimal capital structure, executive management, shareholder mix, and targeted products and services. Finally, AlShall helps in implementing the restructuring plans (legal, financial or other requirements) and bridging any funding gaps.

Debt Restructuring
In the event of stressed or distressed situations, AlShall assists its clients in:

  • Being proactive, rather than reactive, by taking action in a voluntary restructuring plan to protect their debt exposures and minimize losses, and/or avoid reaching financial distress.
  • Take action in restructuring troubled-debt obligations – whether out-of-court or in-court under the Kuwait Financial Stability Law, with the primary aim of minimizing and halting further losses, avoid bankruptcy, and operate on a going-concern.

AlShall assists in restructuring contractual debt obligations through refocusing the corporate strategy of firms/companies and streamlining their operations with the underlying premise of mainly:

  • restructure the balance sheet through resizing the firm’s assets or investments portfolio, changing its capital structure, and/or ownership/control, to ensure that:
    i) debt servicing and repayments are met based on a Corporate Debt Restructuring (CDR) plan which takes into account the firm’s cash flow generation ability,
    ii) all involved stakeholders (banks, other creditors, shareholders, investors, potential management) are treated fairly,
    iii) overall liquidity is enhanced,
    iv) profitability and sustainable growth are restored, and
    v) as an ultimate objective, shareholders’ wealth is preserved and maximized.
  • Extend support in implementation of the financial restructuring plan.

Financial Restructuring Experience List

PROJECT NAME COUNTRY SECTOR SERVICES PERFORMED COMPLETION DATE
Restructuring of a listed real estate company Kuwait Real Estate Financial restructuring 2012
Strategic and HR planning for a listed investment company Kuwait Financial Services Financial and organizational restructuring – strategic and human resources planning 2012
Strategic planning for an investment company for dissolution purposes Kuwait Financial Services Strategic planning for dissolution purposes 2012
Valuation of an industrial company for restructuring and expansion purpose Kuwait Industrial Valuation for the purpose of restructuring 2012
Restructuring of an investment company Kuwait Real Estate – Financial Services Restructuring and valuation of an investment company 2012
Valuation of a holding company Kuwait Real Estate – Financial Services Valuation of a holding company i.e part of a group for internal restructuring purposes in order to investigate the potential of consolidating its activities with other companies within the same group. 2012
Valuation of a holding company in order to investigate the potential of consolidating its activities with other companies within the same group. Kuwait Real Estate – Financial Services Valuation of a holding company i.e part of a group for internal restructuring purposes. 2011
Valuation of an investment company for restructuring purposes Kuwait Financial Services Valuation of an investment company for restructuring purposes 2010
Valuation of four real estate companies for purposes of restructuring Kuwait Real Estate Valuation of four real estate companies (sister concerns) for purpose of restructuring and establishing a holding company 2010
Valuation of a spare parts trading & services company Kuwait Trading Valuation, legal & financial structuring & placement of an A/C and spare parts trading company 2008
Establishment of an oil & gas company for sale, maintenance & repair of oil production equipment .wl.l. KSA Oil & Gas Valuation, legal & financial structuring & placement 2007
Valuation of an engineering projects company Kuwait Contracting Valuation study, licensing, legal & financial structuring and Information Memorandum for a company dealing with A/Cs and spare parts 2006
Valuation of a contracting company Kuwait Contracting Valuation study, licensing, legal & financial structuring and Information Memorandum for a company providing specialized engineering and contracting services 2006
Establishment of a real estate company Kuwait Real Estate Valuation, feasibility study of capital increase, legal and financial structuring and preparation of placement documents 2004
Capital restructuring and financing sources options assessment Qatar Logistics Financial structuring, assessment of legislative environment for Sukuk issue, rating agencies assessment 2007

Financial Restructuring Examples

Project Example – Financial Restructuring

Assignment Preparing a corporate level strategy to restructure the debt and assets of an investment company (balance sheet restructuring)
Client Name Kuwaiti investment company
Client’s Activities Leasing, finance and investment
Project Size
  • Debt obligations size for restructuring: ~USD 125 million (contractual debt) and ~USD 50 million (other obligations)
  • Assets size for restructuring: ~USD 265 million (mostly real estate investment properties)
Assignment Date & Duration 2012, 3 months
Main Area of Focus Restructure company’s indebtedness (local debts) and investments with the aim of primarily: i) restructuring paying-out its defaulted financial obligations in full, ii) restructuring its assets-base, and iii) avoiding liquidation (or bankruptcy). The objective is to keep the company operating on an ongoing basis and restoring its profitability with an ultimate goal of protecting shareholders’ wealth.
Services Provided
  • Review, analyze and assess the company’s financial position and assess its liquidity base and solvency position.
  • Identify and assist in determining the fair value of the assets to be used in the debt restructuring plan and especially those to be collateralized.
  • Review the existing strategy and assist in developing a realistic strategic plan to serve the company’s goals and guide it in its corporate debt restructuring plan.
    o Assist in setting strategies to ensure the settlement and closing of debt claims from all creditors and other related parties claims while preserving and protecting shareholders wealth.
    o Assess and propose a debt restructuring plan and prepare debt restructuring schedules accordingly.
    o Assess and estimate future cash flows under the context of a corporate debt restructuring plan.
  • Propose an out-of-court Corporate Debt Restructuring (CDR) plan with alternative scenarios to be presented to creditors.
  • Assist the client in negotiations with creditors, especially the most senior creditors (in terms of size of outstanding debt and collateral) in order to reach an understanding on a CDR plan scenario acceptable to all stakeholders prior to resorting to protection under Kuwait’s Financial Stability Law (“FSL”) No. 2 of 2009.
Outcome The company received approval to enter under FSL Law based on the CDR plan developed by AlShall

 

Project Example – Strategic Planning

Assignment
  • Strategic plan for restructuring an investment company’s assets in order to reallocate assets to more attractive asset classes, and facilitate meeting debt obligations.
  • Alternative business models were developed with a focus on a real estate investment strategy
Client Name Kuwaiti listed investment company
Client’s Activities Direct investment, investment banking and asset management
Project Size Assets Size: ~USD 700 million
Assignment Date & Duration 2012, 5 months
Main Area of Focus Assist the client in developing a strategic plan with the aim of: i) optimally restructuring assets and liabilities in order to meet current financial obligations while allowing future growth, ii) evaluating new sources of revenues and different operating models, iii) revising the strategy to focus on real estate investments, iv) recommending optimal skills and staffing levels for the target organization structure, and v) recommend new grading and compensation schemes. The objective is to advice the Company on the optimal method of restructuring, which would assist in the progress towards its revised business strategy focusing on real estate investments as well as repayment of debt obligations.
Services Provided
  • Reviewed and assessed the company’s financial, liquidity and solvency position, its underlying assets/investments, and subsidiaries’ base and their composition.
  • Reviewed the company’s existing and adopted corporate debt restructuring plan and assessed its impact on the company’s existing strategic plan and business model.
  • Assessed the company’s strategic position within its sector and identified any gaps in its strategic plan, business model, and implementation action plan.
  • Reviewed and recommended alternative business strategies
    o Reviewed possibilities of improving the company’s investment activities/services by adding new activities
    o Reviewed the role and strategy for each subsidiary within the group to fit within the Parent’s revised strategic plan
    o Reviewed capabilities that could be provided by existing resources and capabilities that would have to be sourced separately.
  • Reviewed and assessed overall asset-liability management to ensure that timing of cash flows from assets investments/divestments fitted the company’s overall strategy and adjusted where required the company’s asset allocation.
  • Advised on company’s capital restructuring plan and provided guidance on writing-off losses, capitalizing premiums and reserves and reaching an efficient equity capital structure.
  • Recommended optimal skills and staffing levels to match target organization structure, including right-sizing and alternative skills and structure wherever applicable.
Outcome
  • Adjusted and developed the existing business strategy to match the revised focus towards real estate investments as well planned for adequate cash inflows to serve debt obligations.
  • Three detailed presentations were approved by the company’s management and a summary presentation was made to the board of directors which included:
    – External and internal analysis of the company’s situation, positioning and review of strategic plan
    – Second opinion on the strategy, business model and asset allocation
    – Human resources analysis and recommendations (including new organization structure and compensation scheme)
  • Recommendations were adopted and put to implementation.