The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Corporate restructurings: New kids on the chopping block

The process of restructuring struggling enterprises in this downturn will be different not only because of the nature and number of stakeholders in each deal, but also because new players are present at the restructuring table.

Corporate restructurings: We can work it out

In the UK, pension trustees now have a seat at the table and they have security. The Pension Protection Fund (PPF) was established in 2004 to provide compensation to members of eligible defined-benefit pension schemes when the employer is insolvent and there are insufficient assets in the pension scheme to cover the PPF level of compensation. Eligible corporates are charged a levy to cover the cost of compensation. Recent figures released by the PPF show that the 7,800 schemes now insured by the fund have an asset shortfall of £155 billion ($237.7 billion). This has raised concern among restructuring professionals that the levy charged by the scheme will have to rise. "The size of the levy charged by the PPF is dependent on the perceived risk of the company," says Andrew Speirs at Hawkpoint. "If the number of companies going bust increases massively then the fund could increase this levy – something that would suck value out of corporate equity and into the pension fund." The PPF itself is adamant that the levy will not be increased – at least not yet. "The PPF levy is capped at £800 million," the PPF tells Euromoney.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree