Projects & infrastructure require significant funding. Transactions in this sector often involve long term commitments with substantial spending. Funding structures typically assume a predictable income on the project, at a level sufficient to repay debt, and with little capacity to cope with major changes in financial prospects of the project.
This creates financial risk. Potential difficulties which seemed unlikely at the start of the project can blow up into major problems as circumstances change.
If problems do arise, solutions can be difficult to find or implement.
Project vehicles may have little capacity to absorb losses and their backers may be unwilling to make up shortfalls. The recent high profile Carillion and Interserve cases show that, even where the project vehicle is part of a large group, there may be little real financial capacity in the project company to address these difficulties.
To address these issues Fladgate have set up a multi-disciplinary team to advise clients.
Some of the areas commonly covered include:
- advice on strategic options open to directors or stakeholders of distressed business;
- emergency fundraisings
- acting for insolvency practitioners appointed as administrators or other insolvency office holders over businesses
- representing creditors and joint venture partners of projects or infrastructure projects in insolvency procedures and distressed transactions
- planning transactions where insolvency risks are feared
- asset recovery, fraud, breach of duty or other litigation proceedings.