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Schemes to Restruction

老师您好,

请问为什么这里不是Property+Plant+Vehicles的价格一起减去清算成本和一级债呢?

谢谢老师

Financial Reconstruction 2021-11-02 18:42:47

问题来源:

Nomore Ltd, a private company that has for many years been making mechanical tools, is faced with rapidly falling sales. Its bank overdraft (with MA Bank) is at its limit of $1,200,000. The company has just lost another two major customers.

STATEMENT OF FINANCIAL POSITION (EXTRACT)

 

31. 3. X2

 Projected

Non-current assets

$’000

Freehold property

5,660

Plant and machinery

3,100

Motor vehicles

320

Current assets

1,160

Total assets 

10,240

Ordinary shares of $ 1

5,600

Accumulated reserves/(deficit)

(6,060)

Total equity

(460)

 

STATEMENT OF FINANCIAL POSITION (EXTRACT)

 

31. 3. X2

 Projected

Non-current liabilities

$’000

10% loan 20X8 (secured on freehold property)

1,600

Other loans (VC bank, floating charges)

4,800

 

6,400

Current liabilities

 

Trade payables

3,100

Bank overdraft (MA bank, unsecured)

1,200

Total equity and liabilities

10,240

Other information:

        The freehold property has a market value of about $5,750,000.

        lt is estimated that the break-up value of the plant at 31 March 20X2 will be $2,000,000.

        The motor vehicles owned at 31 March 20X2 could be sold for $200,000.

        In insolvency, the current assets at 31 March 20X2 would realise $1,000,000.

        Insolvency proceeding costs would be approximately $500,000, this will rank first for repayment.

The company believes that it has good prospects due to the launch next year of its new Pink Lady range of tools and has designed the following scheme of reconstruction:

        The existing ordinary shares to be cancelled and ordinary shareholders to be issued with $2,000,000 new $1 ordinary shares for $1.00 cash.

        The secured loan to be cancelled and replaced by a $1,250,000 10% secured bond with six-year term and $600,000 of new $1 ordinary shares.

        VC Bank to receive $3,200,000 13% loan secured by a fixed charge and 1,100,000 $1 new ordinary shares.

        MA bank to be repaid the existing overdraft and to keep the overdraft limit at $1,200,000 secured by a floating charge.

If this plan is implemented, the company estimates that its profits before interest and tax will rise to $1.441 million and its share price will rise to $1.50.

Required

Evaluate whether the suggested scheme of reconstruction is likely to succeed.

Step 1: Estimate the position if insolvency proceedings go ahead

Break-up values of assets at 31 March 20X2

 

$’000

Freehold

5,750

Insolvency costs

                    (500)

10% loan (fixed charge)

(1,600)

 

3,650

Plant and machinery

2,000

Motor vehicles

200

Current asset

1,000

 

6,850

Secured creditors (floating charges)

(4,800)

 

2,050

Trade payables and overdraft

4,300

If the company was forced into insolvency, the secured loan and other loans would be met in full but, after allowing for the expenses of insolvency proceedings, the bank and trade creditors would receive a dividend of 48c per $. The ordinary shareholders would receive nothing.

Step 2: Apply the reconstruction and evaluate the impact on affected parties

Secured loan

Under the scheme they will receive securities with a total nominal value of $2,150,000 ($1.25m bond+$0.9m shares being 600,000 shares at$1.5); this is a significant increase. The new bonds issued can be secured on the freehold property. So, this may well be acceptable but it depends on whether they agree with the share valuation and whether the increase in wealth compensates for the greater risk less security).

VC

VC's existing loan of $4.8m will, under the proposed scheme, be changed into a $3.2m secured loan and $1.65m of ordinary shares (1.1m shares at $1.50). In total this gives total loans of $4,450,000 (including the bond) secured on property with a net disposal value of $5,750,000 (so the security given by the property comfortably covers the full value of the debt that is secured on the property).The scheme will give an improvement in security for VC on the first $3,200,000 to compensate for the risk involved in holding ordinary shares. This is a marginal gain for a position that exposes the bank to high levels of risk.

MA bank

This should be acceptable because of the security of a floating charge.

Ordinary shareholders

In insolvency proceedings, the ordinary shareholders would also receive nothing. Under the scheme, they will lose a degree of control of the company because 3.7m shares will be in issue (2m for existing shareholders + 0.6m for secured loan holder + 1.1m for VC bank) and they will only own 2m of these, ie 54% of the total. However, in exchange for their additional investment, equity in a company which will have sufficient funds to finance the expected future capital requirements and which will offer a capital gain compared to their initial investment of $1.

Step 3: Check if the company is now financially viable Cash flow forecaston reconstruction

 

$’000

Cash for new shares from equity shareholders

2,000

Repayment of overdraft

                    1,200

Cash available

800

A cash flow forecast will be required to establish whether this is a sufficient cash base for the company post-reconstruction.

Conclusion

This scheme of reconstruction might not be acceptable to all parties, if the future profits of the company seem unattractive. In particular, VC might be reluctant to agree to the scheme. In such an event, an alternative scheme of reconstruction must be designed, perhaps involving another provider of funds (such as another venture capitalist). Otherwise, the company will be forced into insolvency.

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迟老师

2021-11-03 13:27:47 611人浏览

勤奋刻苦的同学,您好:

这里涉及到一个偿还顺序问题,有抵押物先扣抵押物的资产,然后如果不够再从流动资产里面扣除。不可以把抵押物和流动资产加到一起,共同进行清算,考试的时候也要按老师讲的顺序进行计算以免出现错误

每个努力学习的小天使都会有收获的,加油!
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