Bridging the gap
When infrastructure deals go wrong, restructuring them can become spectacularly complex; particularly when resolution processes put in place at deal inception are largely theoretical rather than based on prior restructuring experience.
So, how can this gap between theory and practice be bridged to enable successful restructuring of infrastructure assets?
As more and more capital flows into infrastructure, why worry about restructuring?
As we’ve seen across the sector in recent years, the very qualities that make infrastructure assets so attractive to investors, such as the essential nature of the service, strong regulatory oversight and watertight contractual frameworks, tend to magnify the difficulties of a workout when deals go wrong.
This paper introduces some of the components contributing to that complexity and sets out a tried and tested five-stage approach to resolve distressed situations in the infrastructure sector, including:
Assessing the risks
- Which deals and sectors are most exposed?
- How ‘safe’ is regulated infrastructure
- What are the impacts of financing arrangements on project risk?
What are the key components to a successful resolution?
If an infrastructure asset becomes distressed, one of the most important pieces of analysis is to form a robust contractual and commercial understanding of the relative standing of each of the major stakeholders – thereby enabling an investor to optimise their negotiating strategy reflecting where the balance of power really lies.
What could this mean for your portfolio?
We would be delighted to discuss the insights in this paper – please do contact the authors or our team at firstname.lastname@example.org