For commercial banks

Commercial banks significantly suffered from the recent economy recession. Liquidity shrinkage showed the necessity of effective loan portfolio management and thorough work with distressed assets

Our team closely works with a number of commercial banks on restructuring procedures of distressed borrowers

Identification of distressed borrowers

Loan and investment projects portfolio may contain assets subject to solvency risks. Fair value of debt collateral can significantly impair during the period of the debt servicing

With the aim to identify borrowers subject to solvency risk at an early stage of the problem we perform the following procedures:

• Financial, tax and legal due diligence
• Determination of debt collaterals fair value ( equity, intellectual property, business)
• Review of business valuation reports and financial forecasts prepared by borrowers

Restructuring of distressed assets

With the aim to keep loans to borrowers subject to solvency risks on the balance sheet the Bank should take urgent measures on restructuring plan specified for each significant borrower

We assist commercial banks in analysis of financials of the borrowers taking into account working capital management, cash flow, assets structure and preparation of short-term financial projections

Development and disposal of assets

Value maximization on disposal of distressed assets could be reach by sale of the business with client portfolio and cash flow if compared to the property sale

Good corporate governance with the aim to increase business transparency positively influence on business value

For the purpose of increase in transparency and business value we assist our clients in the following:

• Review and development of financial models
• Implementation of financial reporting under IFRS
• implementation of management accounting and internal control systems

Assistance in risk analysis of prospective borrowers

Financial statements prepared under Russian accounting practice (RAP), do not always convey the economic nature of operations and therefore are not perceived with high confidence by banks

We assist banks in review of financials of prospective borrowers to assess credit risks:

• Identification of financial, tax and legal issues
• Review of management accounts and reconciliation with RAP
• Preparation of financials under IFRS

Review of business plans and financial forecasts

Financial forecasts and business plans presenting the company’s future financial position may contain methodological mistakes inappropriate assumptions as well as historical financial data

Actual cash flows may sufficiently differ from those in financial forecasts

We carry out an expertise of valuation reports and financial models prepared by the companies as to the accuracy of methodology and key assumptions validity

Besides, we develop financial models for fair value of assets determination and forecasting financial position of the business