Shyam Maheshwari Explains about the ‘Art of Restructuring’ – The New Talk of the Town

Shyam Maheshwari was a member of Ares SSG’s investment committee and is a director of Ares SSG Singapore. His primary role in the institution was the evaluation of investment opportunities in the India and Asia regions. He was the co-founder and chief executive officer of SSG Capital and left the company at end of 2021.He has 17 years of experience in the deal sourcing, analysis and investing industry. He is also an Associate Member at The Institute of Chartered Accountants of India and on the board of various companies. Previously, Mr. Maheshwari served as a Senior Member of the Lehman Brothers Asia Special Situations Group primarily responsible for making principal investments in India.

Shyam Maheshwari was the former Chief Executive Officer, Founder and Partner of SSG Capital Management, and is primarily responsible for SSG’s investment activities in India. He has 17 years of experience in the deal sourcing, analysis and investing industry. On talking about the art of debt restructuring that the financiers are currently delighted about, Shyam points out some critical factors to identify a successful restructuring.

_{Shyam Maheshwari , Founder and Partner of SSG Capital Management}

India’s IBC has now been suspended for new referrals for one year, in recognition of the devastating impact of the Covid-19 pandemic on business activity. Shyam Maheshwari feels that, until the IBC resumes, stressed and distressed companies will either continue to go along without changes or they may revert to the pre-IBC status, determining the debt restricting, according to the Companies Act. As the financiers are delighted about demonstrating their ‘Art of Restructuring’, Shyam Maheshwari points out some factors to identify a successful restructuring.

According to Shyam Maheshwari, there are five critical factors that lean towards differentiating a successful restructuring from a failed one. Firstly, he advices to pick the industry or sector carefully before engaging with an existing lender. Conducting deep diligence and thorough understanding of the business is the next factor. Third factor Shyam Maheshwari speaks about is determining the efficacy of the existing management, changing if necessary and agreeing a path to fill gaps. Negotiating an acquisition price that creates a sustainable capital structure for the underlying business is the next important factor. The fifth critical factor is creating buffers in the business plan for contingencies while recognizing that things will not operate like clocks work.

The temporary halt on referrals to the IBC is a timely moment to reflect on its efficacy and ask how the process can be sharpened for a more impactful resumption, says Mr. Shyam. Most assessments of the IBC are based on the number of companies that have gone through its doors and emerged with a buyer at a reasonable price. According to Shyam Maheshwari SSG, the two most important longer-term benchmarks for judging its success are firstly, if the IBC has changed its credit culture or not, and secondly, if the IBC encourages more out-of-court settlements between all stakeholders or not.

In conclusion, Shyam Maheshwari feels that timely and proactive restructuring of stressed assets will also provide much-needed breathing room to the IBC to clear its large backlog before the next wave of the Covid19 pandemic.