Deloitte RS Viewpoint

November 2015

Read the latest key issues, trends and sector updates impacting the restructuring arena from Deloitte.

Welcome to Viewpoint. This is a quarterly review of the key issues and trends in the restructuring arena.

Steel – An industry in crisis

  • There are four key factors which are responsible for causing the steel industry to reach ‘crisis level’ – oversupply of steel in the market, national protectionism of steel industries, non-competitive energy prices and the exchange rate
  • Construction companies are set to be the biggest steel industry winners but steel producers and associated business will likely lose out
  • The UK Steel Association along with other key steel producers in the UK are looking to the government to help level the playing field for steel production

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Social Housing – A sector facing challenge

  • Social housing enterprise to reduce rents by 1% per year which equates to a c. 12% reduction in real terms over the course of the parliament
  • This reduction is estimated to remove £3.9bn of income from the sector
  • The HCA requested all PRPs to resubmit their 30 year projections by the end of October 2015

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Administrations – Delivering Leaseholds to Purchasers

  • A recent case ruling has highlighted the need for Administrators to closely monitor lease assignment negotiations post sale and to be pro-active in delivering value if negotiations fail
  • The case underlines the importance of involving real estate experts early on in the administration to allow a property marketing programme to run in parallel with any sale of the business
  • Care should be taken in trying to alter rent payment terms otherwise landlords can argue financial loss

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European loan sales soar to new heights
Deloitte PLAS
2015 Deleveraging Report

  • Current indications are that market activity in 2015 will be even greater than in previous years, with sales expected to reach over €150bn
  • This report provides a brief overview of the non-core and NPL market across Europe and looks into market activity so far in 2015, and our expectations of future developments

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Tax considerations when restructuring across Europe
Deloitte’s Restructuring Tax team
A European Perspective

  • Top 5 key tax issues in each of 28 European countries that are critical to manage when restructuring in those countries
  • Impact as Governments evaluate and begin to enact output from the OECD’s base erosion and profit sharing initiatives
  • Consideration of cross-border restructuring techniques

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Recalibrating Government Deloitte’s Public Sector report – State of the State 2015 – 2016

  • Over the course of this decade, UK Government spending is forecast to decline by a fifth
  • Public sector net debt is at £1.5trillion which equals £23,428 for every UK resident
  • This year, debt interest will cost the Government more than it spends on the police and criminal justice system
  • For the local public services, continued austerity measures and demand pressures have begun to trigger signs of financial distress

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