COVID-19 and other market factors, both local and global, have negatively impacted certain sectors, as well as operating businesses generally. Private equity funds may well have investments in portfolio companies, which may be experiencing near-term (and potentially long-term) declining revenues, liquidity constraints and potential challenges to servicing debt.
Where the business fundamentals of such distressed portfolio companies are sound, there may be a number of restructuring options available to a portfolio company and its fund and other shareholders. However, for a successful implementation of a restructuring option, action must be taken at the earliest stages of distress rather than at a point of no return.
