Effective Debt Management: The Key to Corporate Restructuring

In 2023, Switzerland saw a record high in bankruptcy proceedings, with the Federal Statistical Office (FSO) reporting 15,447 cases—a 2.9% increase from the previous year. This marks the third consecutive year of growth in bankruptcy cases. However, despite this surge, financial losses decreased by 11.7%, amounting to around two billion Swiss francs. These trends highlight the critical need for efficient debt management.

For companies facing financial distress, restructuring is often essential. Central to this process is robust debt management, which involves structured measures to restore financial stability and manage long-term obligations.

The first step in this process is a detailed analysis of all debts. It is crucial to understand the type, amount, and repayment terms of each liability. With a clear overview, management can improve their approach in line with projected cash flows.

Open discussions with creditors are vital for renegotiating payment plans, reducing interest rates, or even partially canceling debts. Transparent communication and a constructive approach are essential for finding mutually acceptable solutions. The involvement of experienced negotiation partners can be particularly helpful.

Debt restructuring can take various forms, including new financing instruments, modified terms, or interest rates. Combining liabilities and transferring them to new creditors are also practical options. Careful planning and expert advice ensure that new obligations are still sustainable over the long term.

Sound financial planning is indispensable for long-term stability. A comprehensive financial plan should encompass debt reduction strategies, cash flow projections, and investment plans. This enables companies to achieve their financial goals while keeping a healthy balance between debt and equity.

Our Expertise

Leverage our ability in analyzing and restructuring corporate debt. We offer customized solutions to secure your financial stability and ensure long-term success. Contact us to steer your company towards a stable future.

Conclusion

Managing debt during a restructuring is challenging but offers an opportunity to stabilize the company. Through thorough analysis, targeted negotiations, debt restructuring, cost reduction, and efficiency improvement, supported by comprehensive financial planning, companies can build a sustainable financing structure.