It's a compromise agreement entered into between creditors and The Company on application to the High Court, by either of them. In this case the Court shall direct the proceeding in manner it considers justified, in consultation with either parties.
This arrangement is effective when company is over burdened with debt and debt servicing is causing operational instability and substantial capital has been eroded by losses, due to which actual capital employed is getting diluted compared to paid up capital. Arrangement with Creditors to will help restructure this debt.
Some of the benefits accruing are
- Dilution of debt burden
- Arrangement creditors for restructuring secured and/or unsecured loans
- Conversion of debt into equity
- This facilitate optimum credit utilization and servicing and eases day to day smooth operation of business
As solution to hassles involved, HU consultancy provides planning and execution of strategy in lights of allied laws and taxation matters, with backing of highly experienced team of CAs, CSs and solicitors, we will be acting as project manager on behalf of you taking entire responsibility from end to end, assisting you in all the intricacies involved in carrying out successfully Arrangement with Creditors &