In the last few years, many businesses faced a shortfall in finances where they can no longer pay their debts and carry on with their work. This case can lead to insolvency procedures and legal proceedings, including liquidation to pay off outstanding debts. It is best to hire an auditing firm that offers insolvency and restructuring services to avoid drastic actions and find the best solutions for the company management and shareholders.
Companies providing insolvency and restructuring services in Egypt, like Ahmed Mamdouh & Co. Kreston Egypt, can offer support in advising on the best strategies, negotiating with creditors, and performing statutory duties. Many alternative solutions can be done to avoid liquidations, such as voluntary company arrangements, administration, and restructuring, and the latter is one of the most favorable solutions for insolvency.
What are the restructuring services?
Restructuring services will particularly revise and modify the financial and operational elements of the business. It involves a severe modification of the structure of the company, the debt, operations, sales cycles, and more to limit financial liability and improve the overall business performance.
Why/when do businesses need insolvency and restructuring services?
Sometimes companies can't foresee drastic global and political events that may impact their economic and financial stabilities, like Covid-19 and the Ukrainian war that caused significant losses to companies worldwide.
Many business owners and managers mistakenly believe they don't need insolvency services until they go through bankruptcy or insolvency. However, hiring an insolvency partner at the earliest signs of financial and cash flow distress could greatly help the company.
We always recommend working with a comprehensive audit firm like Ahmed Mamdouh & Co. Kreston Egypt, offering a wide array of services, including accounting, auditing, insolvency, and restructuring services in Egypt. This can contribute massively to protecting the business against the strong negative impact of such an adverse event. Instead of waiting until the company is going through insolvency, an insolvency partner will provide consultation early on the process, deal with creditors and, if needed, decide on the best strategy early on to avoid liquidation.
A business may also need restructuring services in other more positive cases like going through IPO or buyouts for business exits. A company could also decide on restructuring to optimize its process and decrease costs.
What are the insolvency and restructuring laws in Egypt?
For years, insolvency laws in Egypt have been complicated and burdensome, leading to frustrations that added to companies' financial burdens and made it harder to overcome them. However, in light of Egypt's new direction to encourage and facilitate investments and support companies to thrive, new laws were issued in 2018.
The new legalization helped foster investment growth in Egyptian markets, supporting companies to overcome unprecedented economic and financial difficulties.
One of the most important outcomes of these new amendments is the Restructuring, Preventive Composition, and Bankruptcy law no 11, focusing on creditor participation in debt restructuring to avoid the shutdown of a business and leveraging the business assets of the impacted company more effectively.
This gave global investors prominent convenience in entering the Egyptian market, as they can now exit without facing challenging financial distress. It also guarantees alternative options for investors to explore if they wish to continue their business ventures in Egypt despite economic disruption.
Kreston's Technology Facilitating Insolvency and Restructure
As a global audit firm, Kreston implies top-notch technologies to facilitate its services for all its clients. Ahmed Mamdouh & Co. Kreston Egypt works with local and international lenders, companies’ stakeholders, and all levels of management. We ensure to apply innovative restructuring solutions in a wide range of roles to protect and enhance stakeholders' interests.
We work with companies in financial distress by suggesting alternatives to help recovery, such as restructuring, administration, or assisting with judicial insolvency proceedings. We also work with potential buyers, shareholders, and directors during buyouts and exists in addition to creditors and insolvency administrators.
Our consultants leverage intelligent tools to improve the company's status before more threatening action is needed. We implement AI and machine learning to help companies and their managers anticipate, prepare and organize essential information about the company faster, lowering repetitive, time-consuming tasks in the process.
Our insolvency and restructuring services bring almost 30 years of experience working with banks, lawyers, insolvency courts, and credit insurers, and updated familiarity with insolvency and bankruptcy laws in Egypt and globally to support our international clients.
How to protect your personal assets during the process?
Working with an audit firm will ensure shareholders and investors avoid any personal liability for company debts other than their shareholding. One of the things we care for the most at Ahmed Mamdouh & Co. Kreston Egypt is protecting investors' and shareholders' assets during insolvency procedures.
A key piece of advice our consultants always give to shareholders to avoid personal liability that may arise is to avoid offering a personal guarantee for company debt. We also ensure our clients repay their debts to creditors based on the right considerations to avoid bias allegations.
For more information about insolvency and restructuring services in Egypt, our team will gladly offer consultations tailored to your business’s case and help your company mitigate hardships.
References:
- https://www.wilsonfield.co.uk/duties-insolvency-practitioner/need-an-insolvency-practitioner/
- https://uk.practicallaw.thomsonreuters.com/9-385-9763
- https://www.investopedia.com/terms/i/insolvency.asp
- https://www.investopedia.com/terms/r/restructuring.asp
- https://www.lucidchart.com/blog/5-steps-in-the-company-reorganization-process
- https://practiceguides.chambers.com/practice-guides/insolvency-2021/egypt/trends-and-developments
- https://www.forbes.com/sites/forbestechcouncil/2020/07/14/using-technology-to-streamline-corporate-restructuring-in-the-wake-of-covid-19/
- https://www.investopedia.com/articles/retirement/07/buildawall.asp