TOOL 6.0
What are the Banks Options?
| 1. Do Nothing | – Is repayment due soon? – If situation is too uncertain then review daily |
| 2. Exit | – Line must be Bilateral – Excess liquidity available in company? (Bank lines in default?) – Are there assets which are available to be taken as security? |
| 3. Reduce Exposure or increase security (Tool Pl 6.1) | – Are other creditors/stakeholders sleeping? – Are there any legal problems e.g. negative pledges/cross default or cross acceleration/hardening periods |
| 4. Standstill / Workout (Tool Pl 6.2) (Tool Pl 6.3) | – Take care re additional risks during standstill/workout period: a. Adverse impact on other clients b. Breaking contracts c. Cash Diversion d. Debt Priority e. Exposure Increases f. False or misleading information g. Gradual erosion of net worth h. Harm to Banks reputation |
| 5. Liquidation / Bankruptcy | – Last resort – No chance of improvement |
