Skip to main content
Request for proposal

      KPMG has significant experience in debt restructuring engagements in Ukraine. We have deep knowledge of the specific aspects of working with major international and state banks, and we understand both their needs and expectations in the restructuring process.

      Our practical experience and understanding of the process enables us to provide both technical and analytical support, as well as acting as moderators throughout the entire restructuring project.

      • Independent financial analysis
      • Organising the internal debt management function
      • Managing non-performing loan portfolios
      • Sale of rights of claim

      Independent financial analysis

      What’s on your mind?
      • The borrower’s financial position has recently deteriorated to a significant extent.
      • Scheduled interest and principal repayments exceed the cash flows generated by the borrower’s business.
      • The borrower has breached the financial covenants or is expected to breach them in the nearest future.
      Yuriy Fedoriv
      Yuriy Fedoriv

      Partner, Advisory, Head of Turnaround and Restructuring, Head of Financial Services

      KPMG in Ukraine

      Request for proposal
      Your questions
      • Why has the borrower’s financial position deteriorated?
      • Are any funds being channelled out of the business?
      • How robust are the borrower’s forecasts?
      • Which factors affecting cash flows are under the borrower’s control, and which are not?
      • Can the loan be refinanced?
      • Can the security be foreclosed?
      • Can the debt be converted to equity in the company?
      • Can the debt be sold?
      • What realistic debt servicing and repayment arrangements may be adopted given the borrower’s current financial position and forecasts for the future?
      How can KPMG in Ukraine help to conduct an independent financial analysis?
      • Independent business review

      We undertake a comprehensive review of the actual position of the borrower, including the financial condition of the company, its market position, management system, top management personnel, and analysis of the most significant risks. Based on the results of the study, we prepare a report that includes a detailed summary of all the facts determined, as well as a brief summary of the current situation and our proposals for further steps.

      • Short-term liquidity analysis

      We undertake a detailed analysis of all receipts and planned expenses for the previous month (budget vs actual) and a forecast for the next 13 weeks (4 weeks and 2 months) to ensure that lenders have a clear understanding of cash flows in the short term and can decide on the next steps in both the short and long term.

      • Analysing financial models and forecasts

      We provide an independent review of the financial forecasts prepared by the borrower, critically analysing the underlying assumptions and identifying potential factors for overstating/understating the forecast. We also conduct a dedicated technical audit of financial models.

      • Evaluating available options

      We prepare a set of realistic scenarios for debt repayment, such as like restructuring, debt collection or business sale, and then compare these options; giving the bank a basis for negotiations.

      • Cash flow monitoring

      We arrange a system of regular monitoring of the borrower’s funds, controlling all proceeds and payments to the selected current accounts. This kind of monitoring can be organised as one of the control measures both during negotiations and after the restructuring agreement is completed.

      Organising the internal debt management function

      What’s on your mind?
      • The borrower only recognises late in the day that it is a distressed company.
      • The system of early warning signals that a borrower may become a distressed company is ineffective.
      • The strategy for working with borrowers does not include a restructuring stage: the borrower is either considered a standard borrower or is immediately classified within the debt recovery pile.
      • The functionality of the debt management division is confined to legal procedures, while an out-of-court settlement procedure has not been applied extensively.
      • There is no methodology for assessing a distressed borrower’s financial position and constructing a respective cash flow forecast. Meanwhile, it transpires that the assessment methodology applied to standard borrowers is also unsound.
      • The process for working with restructured loans during restructuring and after the recovery of solvency has not been set up effectively.
      • The KPI system for the debt management division is likewise ineffective.
      Your questions
      • How do you set up the early monitoring system to promptly identify potential non-performing loans and facilitate the proactive adoption of measures aimed at the strengthening the bank’s position, the recovery of debt, or restructuring?
      • Why are the regular client risk assessment division and business unit ineffective in their work with borrowers that find themselves in dire financial straits?
      • How do you avoid starting the debt recovery procedure too late or too early?
      • How do you enhance the effectiveness of working with bad debt?
      • How do you avoid duplicating the debt management division’s functionality with other bank divisions?
      How can KPMG in Ukraine help with organising an internal bad debt service?
      • We will help you to analyse your system for managing bad debts and identify gaps in the process, as well as any functionality that overlaps with other bank departments.
      • We will design a targeted structure for the bad debt department, taking into account the needs and specifics of your bank.
      • We will describe in detail the differences between the actual and the target structure and provide recommendations for their elimination.
      • We will offer practical and methodological support at the implementation stage of the targeted system for bad debt management, including defining the qualification requirements for bad debt management unit employees, suggesting measures to improve KPIs.

      Management of non-performing loan portfolios

      What’s on your mind?
      • The quality of your bank’s loan portfolio has recently deteriorated significantly.
      • You have the required liquidity reserves and want to acquire a number of problem loan portfolios but have doubts about their actual quality.
      Your questions
      • How can the risks associated with your existing problem loan portfolios be mitigated?
      • Can the problem loan portfolios be sold?
      • What is the actual value of the problem loan portfolios you plan to acquire?
      • What is the optimal loan portfolio sale/acquisition transaction structure?
      How can KPMG in Ukraine help with managing your non-performing loan portfolio?
      • We perform a comprehensive analysis of the problem loan portfolios, determining their quality and actual value.
      • We develop a financial modelling tool to analyse the bank’s business operations.
      • We assist in setting up or improving the performance of your workout unit.
      • We provide consultations regarding transferring problem loans to a specialised problem asset management company.
      • We provide assistance in acquiring/selling loan portfolios, including assessing the indicative reserves, structuring the transaction, analysing the tax aspects, auditing the loan pool, etc.