When your business is struggling to survive the crisis, when all the monthly payments and taxes become a burden too heavy to carry and the dreary shadow of bankruptcy darkens your future, there is still a silver lining behind the cloud: financial restructuring. In an interview to Wall-Street, Marian Urzica and Bogdan Nichisoiu, partners at Consilium Advisors, Romanian company specialized in financial advisory in this burdensome process for a business, explained the concept of financial restructuring in the midst of economic turmoil and obstacles posed by the Romanian market.
Primary drawbacks – entrepreneurs’ mentality and lenders’ lack of cooperation
Established in 2007 by three ex-bankers who pooled their know-how achieved in 15 years of banking, aimed at storming a niche of a market that was starting to shape up, Consilium Advisors launched earlier this year a debt restructuring service, crucial in a collapsing market.
The primary drawbacks to debt restructuring process are the entrepreneurs’ failure to acknowledge their problems and banks’ reluctance in accepting debt restructuring proposal.
Marian Urzica (photo), partner at Consilium Advisors outlined the “London Approach” concept designed by England in the early 90s, which treats the debt restructuring issue of a company in distress. It was successfully implemented when crisis hit Asia with the help of the central banks.
In Romania, however, banks showed reticence toward this concept, preferring to extend grace periods to the debtor, without expanding the process or making it more comprehensible.
“The key to success is the reorganization roadmap and negotiation with the creditors. Prevention is better than cure”, said Urzica.
Another problem many companies have to deal with when restructuring debt, is Romanians’ mentality. They are loath to acknowledge they’re in deep trouble
