Financial Restructuring & Debt Realignment Advisory
Proactive intervention for enterprises experiencing cash flow stress or unsustainable debt servicing burdens. We restructure loan repayment tenures, convert short-term debt, and prevent NPA classification under RBI prudential frameworks.
The Rapid Descent from Liquidity Stress to NPA
External economic shocks, client default, or prolonged project delays can quickly derail an enterprise's debt repayment ability. Under strict RBI norms, an account overdue by just 31 days is flagged as SMA-1, and at 91 days, it is classified as a Non-Performing Asset (NPA), triggering immediate legal action and credit freezing.
Drastic downgrade in credit bureau rating once an account touches SMA-1 or SMA-2 status
High penal interest rates compounding the existing debt burden
Banks threatening SARFAESI action, asset attachment, or debt recovery proceedings
Promoters attempting informal restructuring without institutional financial presentation
Who Needs Financial Restructuring?
Essential for enterprises experiencing debt servicing friction or temporary cash flow disruption.
Enterprises in SMA-0 / SMA-1 / SMA-2 Categories
Facing temporary liquidity crunches and needing debt repayment re-profiling before NPA.
Over-Leveraged Manufacturing Units
Carrying high-cost short-term debt that needs conversion into structured long-term loans.
Promoters Exploring One Time Settlement (OTS)
Entities with legacy stressed accounts seeking an orderly, negotiated settlement with lenders.
Our Restructuring Solutions
We craft bankable restructuring proposals that protect enterprise viability.
RBI Prudential Framework Realignment
Structuring debt resolution plans strictly adhering to RBI's Prudential Framework for Resolution of Stressed Assets, incorporating tenure extensions and interest rationalization.
Short-Term Debt to Long-Term Conversion (WCTL)
Converting accumulated cash credit overdues and unpaid interest into a Working Capital Term Loan (WCTL) with a structured repayment amortization.
Non-Core Asset Monetization Strategy
Identifying surplus land, non-operational machinery, or investments that can be liquidated to inject equity and reduce bank liabilities.
One Time Settlement (OTS) Financial Appraisal
Analyzing underlying asset security valuation and drafting structured compromise settlement proposals aligned with bank OTS policies.
Our Restructuring Process
A disciplined, milestone-driven execution process ensuring every technical, financial, and statutory parameter is banker-ready.
Immediate Liquidity & Debt Audit
Reviewing outstanding bank facilities, interest overdue, SMA status, and immediate cash generation capacity.
Techno-Economic Viability (TEV) & Cash Modeling
Building a realistic cash flow model demonstrating sustainable debt-servicing capacity under restructured terms.
Restructuring Proposal Formulation
Drafting institutional restructuring dossier: WCTL conversion, revised moratorium, and proposed repayment schedule.
Lender Negotiations & Implementation
Assisting promoter in presenting the resolution plan to the bank's Stressed Assets Management branch or Consortium.
Documents Required
To initiate your advisory engagement efficiently, our desk requires verified primary records. All documents are handled under strict non-disclosure terms.
Debt & Banking
- All existing bank sanction letters, modification letters, and loan account statements
- Bank notices received (recall notices, 13(2) notices under SARFAESI, or legal summons)
- Audited balance sheets for past 3 years and current provisional financial statements
- Schedule of collateral properties with latest valuation reports
Operational
- Age-wise debtor and creditor aging reports
- Order book position and confirmed customer contracts
- Itemized list of all movable and immovable company assets
Deliverables
Every deliverable is crafted to institutional banking standards, complete with dynamic calculation sheets, executive briefs, and certified dossiers.
Debt Restructuring & Resolution Dossier
Institutional proposal detailing root causes of stress, viability analysis, and proposed restructured repayment terms.
Restructured Cash Flow Model
Monthly cash flow model showing revised debt servicing and sustainable DSCR under restructured terms.
OTS Feasibility Note (if applicable)
Benchmarking compromise offer against distress asset valuation and bank settlement policy guidelines.
Engagement Workflow
Transparent, structured progression showing actions and concrete outcomes at every stage.
Stage 1: Crisis Assessment
Stage 2: Model & Dossier
Stage 3: Bank Negotiations
Frequently Asked Questions
Institutional insights regarding appraisal standards, banking requirements, and advisory methodology.
What is the difference between SMA-0, SMA-1, and SMA-2?
Special Mention Accounts (SMA) are categorized by the RBI based on overdue duration: SMA-0: Principal or interest payment overdue between 1 and 30 days. SMA-1: Overdue between 31 and 60 days. SMA-2: Overdue between 61 and 90 days. At 91 days, the account is classified as a Non-Performing Asset (NPA).
Can an MSME restructure its debt without being taken to NCLT / IBC?
Yes. Under the RBI's Prudential Framework and the MSME restructuring framework, viable enterprises can negotiate bilateral or consortium debt resolution directly with their lenders without going through the National Company Law Tribunal (NCLT) or insolvency proceedings.
Related Services
Advisory capabilities frequently engaged alongside Financial Restructuring for comprehensive credit and statutory readiness.
MSME Advisory
Comprehensive advisory for established MSMEs facing working capital bottlenecks, debtor delays, credit rating stagnation, or operational expansion challenges.
Working Capital Advisory
Strategic structuring and enhancement of fund-based (Cash Credit, Overdraft) and non-fund-based (Letters of Credit, Bank Guarantees) working capital facilities.
Financial Modelling
Institutional-grade financial models featuring Discounted Cash Flow (DCF) valuation, Internal Rate of Return (IRR), Weighted Average Cost of Capital (WACC), and debt sizing.
CMA Data
Form I to Form VI preparation containing audited historicals, provisional statements, and 5 to 7 years forward projections meeting RBI Tandon and Nayak committee norms.
Engage With Our Project Finance & Advisory Desk
Connect with our senior financial analysts and advisory professionals to structure your credit proposal, review project feasibility, or prepare bankable documentation.
Statutory & Regulatory Notice
Financial restructuring advisory provides diagnostic modeling, resolution plan drafting, and negotiation support. Decisions regarding loan tenure extensions, interest concessions, or One Time Settlements are solely at the discretion of the lending institutions and their competent recovery committees. VS Project & Financial Advisory Private Limited provides professional project advisory, financial modelling, and document readiness services. We do not claim guaranteed bank sanction or guaranteed funding. Approval is solely at the discretion of the relevant financial institution, bank, NBFC, or government subsidy authority.