debt report.ppt

ABC Co Ltd
Debt / Financial Restructuring Report
June 2001
DRAFT
1
Index
1. Current Financial Position
2. Financial projections
3. Accounts receivable
4. Enterprise restructuring / Debt restructuring
5. Action plan
2
Current financial position
Balance sheet @ 31/12/00
Post due diligence adjustments
Rmb’mil
Cash 13
A/R (net) 152
Inventory 28
Other current 29
Fixed assets (net) 209
Other long term 29
460
Bank loans - with interest 385
Bank loans - no interest 30
Advances from customers 16
Accounts payable 57
Other - not repayable 31
Other 56
deficiency (115)
Notes / issues
“good” A/R likely much less. Refer later.
Refer analysis later
Refer analysis later
to Parent - should be removed
includes approx. Rmb’21 from Parents
3
Current financial position cont...
The deficiency position of the Enterprise is likely to be substantially worse as “Good” or collectable accounts receivable is estimated to be significantly less than as currently shown in the accounts.
The Enterprise is paying interest on most bank borrowings.
If amounts shown as not repayable genuinely do not have to be repaid, they should be removed from the balance sheet to improve asset position.
4
Financial projections
A financial model has been prepared for the Enterprise, with monthly assumptions for Y2001, and annual assumptions thereafter.
The format of the model and initial assumptions have been developed in conjunction with management.
The work on a financial model never finishes:
Formats of pages can and should change to meet the requirements of management;
Assumptions will change as a result of:
changes in market conditions;
changes in the business;
identifying differences between actual results and initial estimates
The operating results from the latest version of the model are summarised on the following page. For the purpose of this report, we will use this version of the model as our “Base Case”, to measure sensitivities against.
5
Financial projections cont.
6
Scenario