Problem loans: restructuring as a salvation for business or another test?
Kyiv • UNN
The expert explains the importance of loan restructuring in conditions of economic instability. The procedure helps businesses and individuals cope with problem loans, but requires a compromise between the bank and the client.
In the face of economic instability and significant financial problems caused by the war, many loans from both legal entities and individuals have become problematic. One of the tools that helps solve this problem is loan restructuring. This was stated by economist Alexander Okhrimenko in an exclusive comment to UNN.
"Today, as a result of the war, a large number of loans are problematic. First, there are some loans that have been problematic since 2013, and it is not clear what to do with them.in addition, various reforms have been added, and then there is the coronavirus, the war. Therefore, today, if you look at the truth, most of our loans for legal entities and individuals are problematic," the expert said.
One of the solutions for problem loans is the procedure for restructuring such loans. However, according to Okhrimenko, this is a complex procedure.
"If according to the rules, then it is considered that there should be equal conditions for the bank and for the client. On the one hand, the bank is inferior somewhere, and the client is inferior somewhere. Moreover, the client must honestly explain their financial condition, honestly provide collateral, if it is a secured loan, so that there are no fraudulent actions. And then the bank and the client find a compromise," he explains.
According to the expert, as part of the restructuring, there may be a partial write-off of debt, the amount of interest may be reduced, and so on.
"If you do the right restructuring, you can help the business. But often the business itself does not want it. He just wants to quit and not pay at all. Restructuring does not mean that the loan can not be repaid, the bank can simply make concessions such as postponing the term, creating some conditions, etc.," points out Alexander Okhrimenko.
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It is worth noting that loan restructuring is not a panacea, but a temporary solution that allows you to gain time and stabilize your financial situation. It does not eliminate problems, but it makes it possible to survive difficult times and avoid catastrophic consequences.
One of the representatives of Ukrainian business who, in response to financial difficulties, resorted to loan restructuring is the owners of IFC Gulliver. In this case, the debt restructuring was carried out in accordance with the law, which was developed at the initiative of the IMF and provided for special safeguards so that the entire process took place without abuse. One of them is the participation of third-party independent experts, which is why world-famous companies were involved in this case. Experts proposed more than 10 options for restructuring and, according to the law, one was chosen that could provide maximum economic benefits for The attracted creditor banks. Thanks to the debt restructuring and the recovery of economic activity, IFC Gulliver managed to stabilize the financial condition of the project.
