Restructuring a company’s debts is not a simple process. Unlike acquisition deals, when everyone around the table has something to gain, a restructuring requires everyone to agree to lose something.
Pain has to be shared but everyone has an interest in ensuring someone else takes more of that pain.
As a result, the larger and more complex a company’s debt structure, the more likely it is that restructuring the company’s debt will be a long and difficult process.
These are facts the management at British care home company Four Seasons Healthcare know all too well.
The company found itself loaded up with around 1.4 billion pounds of debt, split across 11 tranches and more than 30 lenders, via an ambitious securitisation at the top of the market in 2006.
