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The Law on consensual financial restructuring of companies

Consensual financial restructuring of companies in Serbia a short presentation of major features of new Law on consensual financial restructuring of companies . The Law on consensual financial restructuring of companies.

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The Law on consensual financial restructuring of companies

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  1. Consensual financial restructuring of companies in Serbiaa short presentation of major features of new Law on consensual financial restructuring of companies Consensual financial restructuring of companies

  2. The Law on consensual financial restructuring of companies • A legal novelty: The new Law on consensual financial restructuring of companies is a significant legal novelty in the Serbian economic and legal systems. It represents the “middle-of-the-road” between debt settlements and prepackaged reorganization plans. • An alternative to more radical solutions:The institute of consensual financial restructuring offers an alternative exit to debtors heavily hit by the economic crisis, but also to creditors who do not wish to go for enforced collection but are ready to give the debtor a second chance. • Will it be successful?:It remains to be seen in practice whether the goals of the legislator will be accomplished in the time to come. Consensual financial restructuring of companies

  3. Consensual financial restructuring • Consensual financial restructuring is based on 2 major agreements: Financial Restructuring Agreement and Debt Standstill Agreement • For successful implementation of the consensual financial restructuring, mutual trust between debtors and creditors involved in the process is absolutely necessary • Financial restructuring can be implemented if a minimum of two domestic or foreign banks are involved in the process as creditors Consensual financial restructuring of companies

  4. Debtor in consensual financial restructuring can be… Consensual financial restructuring of companies

  5. The rules and principles of consensual financial restructuring • Consensual financial restructuring, as defined by the Law, is re-arranging of debtor-creditor relationship between a company in financial difficulties and its creditors • Financial difficulties, as defined by the Law, are: inability to pay debts (illiquidity), threatening inability to pay debts (threatening illiquidity) and over-indebtedness • Debt Standstill is a temporary suspension of the fulfillment of the debtor’s obligations; as well as prohibition or stay of enforced collection for creditors who participate in the financial restructuring Consensual financial restructuring of companies

  6. Measures of financial restructuring • Inter-mediation in negotiations between the debtor and the creditors • Institutional inter-mediation bythe Serbian Chamber of Commerce (at the request of the debtor or the creditors) • Contractual inter-mediation by an Expert Consultant(with mandatory participation of the institutional intermediary) Consensual financial restructuring of companies

  7. Comparison between consensual financial restructuring and bankruptcy reorganization Consensual financial restructuring of companies

  8. Our services and contact details Financial Advisory Company WM Equity Partners Ltd. Belgrade is specialized in providing full spectrum of services in cases of out-of-court (consensual) restructuring and bankruptcy reorganization. Contact details: WM Equity Partners d.o.o. Beograd BulevarMihaila Pupina 10A/II New Belgrade Vladimir Pavlović, MSc, CFA, CEO Tel: +381 11 3343 317 Fax: +381 11 3343 987 vladimir.pavlovic@wmep.rs We remain at your disposal for any further questions or information. Consensual financial restructuring of companies

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