FINANCIAL STRUCTURING

Many investments, particularly direct ones, will require an element of financial structuring. This may take the form of straightforward bank borrowing. More advanced types of “structured finance” might also be considered to achieve specific desired goals such as off-balance sheet and/or non-recourse funding. Structured finance can also be used to reduce risks of interest and exchange rate fluctuations and has as its primary objective the lowering of overall borrowing costs.

ASA Consultants has extensive experience in structured finance products and has the capacity to design tailor-made financings to suit individual requirements. Assignments normally take the form of advisory projects. However, ASA Consultants also has the capability to introduce these financings to potential providers of funds.

Occasionally, investments require financial restructuring. This need may be triggered by greater than expected cash requirements or the desire to expand operations beyond the parameters of the original business plan. Existing financiers will be approached and alternative proposals outlined and justified. The professionalism of such presentations is often key to the successful agreement of such proposals. Because existing financiers will typically be asked to provide more funding or funding in a different format, e.g., equity instead of debt, it is absolutely critical that the revised business plan is convincing in its financial detail and that it is seen to be reasonably viable.

Government agencies or governments in their own name may wish to restructure their existing funding. Often the objective is to reduce debt service obligations or to “smooth-out” peak payment requirements. Alternative objectives include the attraction of private sector investment, frequently initiated by a programme of debt/equity swaps. Additionally, privatization of state-owned enterprises can serve the dual purpose of attracting foreign capital and easing the burden of debt.

ASA consultants have contacts throughout the international financial community and are, therefore, uniquely positioned to assist in the re-negotiation and restructuring of sovereign debt. We also have considerable experience in devising programmes which encourage inward capital investment with the concurrent reduction of debt.