Case Study IV: Group Eurotunnel S.A. (A) The first restructuring 1995-1998 The aim of the 95/98 restructuring was to adjust debt levels and terms so that interest expenses could be paid and debts serviced, even considering Eurotunnel’s (ET’s) - compared to budgeted forecasts - higher construction cost, delayed opening, and worse than expected post-construction financial performance. Revenue kept on decreasing in 99/00 (economic growth slowed, decreased tourism, traffic stoppages, telecom cables
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operating costs and a minimum usage charge. Then the company starts raising capital through debt and equity offerings. Eurotunnel got listed in both Paris and London Stock Exchanges and offers discounted (and per my research, free in some cases) travel to shareholders. Construction of the tunnel begins in November of 1987 and it is completed in April 1994. At this point, Eurotunnel has a whopping £8.1 billion in debt and only £1.7 billion in equity. To be honest, this is the part of the paper when my
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ASC470-60-20 states that a “a restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.” Although the “Restructuring” was done due to the debtor’s financial difficulty, there was no concession made by any of the creditors. The effective borrowing rate when considering all the terms of the “Modified Debt” is greater than the effective
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A restructuring of debt constitutes a Troubled Debt Restructuring if the creditor for economic or legal reasons, related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider (FASB ASC 470-60-15-5). That concession either stems from an agreement between the creditor and the debtor or is imposed by law or court (FASB ASC 470-60-15-6). In a Troubled Debt Restructuring, the creditor’s objective is to maximize recovery of its investment by granting
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Restructuring Debt Data ACC 545 July 18, 2011 Restructuring Debt Data Understanding the reporting and disclosure requirements for the different types of debt regarding debt restructuring is imperative. The manager of this company has requested an explanation of the above regarding bonds payable, notes payable, and capital leases. This paper should satisfy any questions about these topics. Long-Term Liabilities Included are several types of long-term liabilities; bonds payable, notes payable
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rapidly through acquisition. The rapid expansion and acquisition though increased the revenues and capabilities of Stolt offshore; it had negative impact on profit margins. The key reasons for getting into trouble were: * Rapid expansion through debt funded acquisitions, poor management, poor cost discipline and failure to integrate the new acquired entities to achieve efficient end to end operations and economies of scale. * Lack of skilled resources to implement right processes for management
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policy lessons. The book fills this critical gap. It covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to crises and considers lessons on their antecedents, analyzes the evolution of crises and examines various policy responses––in terms of macroeconomic policies, restructuring of banks, households, financial institutions and sovereigns, and studies their aftermath––in terms of short- and medium-term growth impacts
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| Debt Management Program in the Philippines | The first debt and debt service reduction operation the World Bank financed was the Debt Management Program Loan to the Philippines, approved in 1990. Its main objective was to help restore the Philippines' creditworthiness by reducing the destabilizing pressures exerted by an excessive debt-service burden. The government, having inherited a huge debt service obligation, formulated a debt restructuring program for the country and a request for debt-relief
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process, in the absence of taxes, bankruptcy cists, agency costs and asymmetric information, an in an efficient market, the value of a firm is unaffected by how the firm is financed. Whether the firm’s capital is raised by issuing stock or selling debt does not affect the value of the firm. This theory is also referred to as the capital structure irrelevance principle, which we have already looked at in previous seminar discussions. There are two propositions which were discussed by Modigliani and
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8, 9, 10, 11, 13, 14, 15 12, 13, 14, 15 16, 17, 18 19 1, 2, 3, 4, 5, 6, 7, 10 1, 2, 3, 4, 5, 6, 7, 10, 11 2, 4, 5, 6, 7, 10 8, 9 10 1, 3, 6 3. 1, 2, 3, 4 4. 5. 6. Retirement and refunding of debt. Imputation of interest on notes. Disclosures of long-term obligations. Troubled debt restructuring. 12, 13 14, 15, 16, 17, 18 19, 20, 21, 22, 23, 24 27, 28, 29, 30, 31, 32 11 12, 13, 14, 15 9 3, 4, 5 1, 3, 5 *7. 20, 21, 22, 23, 24, 25, 26 13, 14, 15 *This material is discussed in the Appendix
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