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Scheme of arrangement

A debt restructuring agreement requires all parties involved to mutually agree on the terms of the restructuring plan, and such plans are commonly implemented under a Scheme of arrangement which serves as an alternative route to borrowers especially in complex and difficult situations:

  • A Scheme is an application to the Court for a voluntary reorganisation under the Companies Act
  • A restructuring plan or Scheme is devised and will be put up for creditors’ approval through a voting process in a court-convened meeting
  • Once the requisite approval is obtained, an application will be made to the Court to sanction the Scheme and it will be binding on all creditors under the Scheme
  • The Court may restrain proceedings against the borrower during the proposed Scheme period
  • Under a Scheme of arrangement, the management retains control of the company. As an independent financial adviser, we can act to devise, propose and negotiate a debt restructuring plan via a Scheme between a borrower and its creditors, and subsequently administer the implementation of the approved Scheme and act as the Scheme Administrator
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