Restructuring of a Distressed Listed Company
The Corporate Finance & Restructuring team at FTI Consulting in Hong Kong has extensive experience in restructuring and relisting distressed listed companies out of provisional liquidation. Listing status is valuable in Hong Kong and investors, particularly those from mainland China, are often prepared to pay a premium to acquire troubled listed companies. This is because a listed vehicle can be used as a platform to have access to the international capital markets and to facilitate any inbound and outbound investments. A listed entity is also viewed by investors and lenders in China as being more credible.
The restructuring and relisting process out of a provisional liquidation is usually achieved by injecting working capital to reshape the underlying business, undertaking a capital reorganisation and paying out creditors via a scheme of arrangement.
The process typically requires the following skill sets:
- Financial Accounting — preparing audited accounts, addressing audit issues and perfecting and implementing internal control processes.
- Management Accounting — re-engineering the underlying business and enhancing operations efficiency and budgeting.
- Legal — reviewing legal documents involved in the process including scheme documents and court sanction documents as well as addressing any legal proceedings in the liquidation.
- Corporate Finance — meeting various listing requirements such as capital reorganisation, public float and underwriting.