Gold Magazine January - February 2014, Issue 34

debt restructuring {money} Protecting Mutual Interests Proper debt restructuring is good for both debtors and lenders By Rakis Christoforou D ebt restructuring is a process in which a debtor and lender choose to rework the terms and conditions that apply to a loan or other facility currently in force. Sometimes known as debt rescheduling or debt refinancing, this strategy is usually employed when the lender and debtor believe there are sound financial reasons for making changes to an existing loan or other facility contract. In general, it is a compromise where both parties receive some sort of benefit from debt restructuring. The current situation in Cyprus calls for such a compromise. Many companies and individuals are looking for ways to improve their cash flow through the use of debt restructuring techniques given the present unwillingness of financial institutions to lend them additional money to cover their needs. Unfortunately we are yet to see proper debt restructuring in Cyprus on the part of Financial Institutions which, in most instances, proceed with refinancing of loans without real benefit to the debtor. The process of debt restructuring can be used in both individual/private and commercial settings. With business debt restructuring, the goal is more often to change t B

Gold Magazine January - February 2014, Issue 34 | Page 66