Insights – Key takeaways on Distressed M&A from SGRI Conference 2024
An engaging and insightful panel discussion on “Distressed M&A: Trends, Challenges and Opportunities” from the Singapore Global Restructuring Initiative (SGRI) Conference 2024 held at Singapore Management University on 30 July 2024.
The panel discussion was chaired by Ajinderpal Singh (Senior Partner, Dentons Rodyk & Davidson LLP) and included panel members, Darius Tay (Director, BlackOak LLC), Kotaro Fuji (Partner, Nishimura & Asahi), Urmika Tripathi (Senior Associate, AZB & Partners) and David Chew (Partner, DHC Capital).
Key takeaways from the panel discussion:
Examined the multiple approaches to distressed M&A transactions using illustrative case studies. Approaches include:
Traditional out of court / out of insolvency process
White knight investor new money injection together with a scheme of arrangement, including the use of super priority rescue financing under Section 67 of IRDA
Insolvency sale from a Liquidator or Judicial Manager (or equivalent in respective jurisdictions)
Debt initiated transactions via loan to own (secondary) or credit bidding
Role of secondary debt trading
Not as prevalent as US, UK or Australia
Pockets of deals in Singapore
Potential future debt trading opportunities arising from leveraged financing structures and squeezing out private equity sponsors as part of a debt-to-equity conversion
Limited number of rescue financing deals in Singapore due to (i) limited supply of opportunities and (ii) lack of value in the businesses that have filed (i.e. no value in underlying business, business un-sustainable and limited hard assets)
About SGRI
The Singapore Global Restructuring Initiative is a project launched by the Singapore Management University with the support of the Ministry of Law that seeks to promote research on restructuring and corporate insolvency law while promoting cooperation between academics, practitioners, judges and policymakers from all over the world.