CFM ARC’s resolution activities revolve around the core idea of maximization of realization from each distressed account it acquires. The main aim of our ARC is to revive and turnaround the distressed company where ever possible, by providing a new lease of life to the borrower/promoter and supporting the livelihood of hundreds and thousands of workers and employees working in these companies.

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Under the extant Reserve Bank of India (RBI) guidelines, ARCs are empowered to adopt one of the following resolution strategies or a combination thereof, for reconstruction of the acquired assets:

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• Change in or takeover of management of the business of the borrower

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• Rescheduling of payment of debts payable by the borrower

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• Settlement of dues payable by the borrower

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• Enforcement of security interest

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• Sale or lease of part or whole of the business of the borrower

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• Convert any portion of debt into shares of a borrower company

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Our ARC’s resolution strategy has primarily been on arranging for additional financing – (last mile financing, critical capex / working capital financing) for the company through our deep connects with banking and financial institutions and the investing banking community, which is crucial for the company’s revival.

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Our secondary strategy is to get into a negotiated settlement with the borrower once account is taken over from the lenders, thereby providing him an extended time period of repayment aligned with the operational cash flows. The convenient repayment scheme leads to value maximization of the company as the borrower is able to plough back majority of the cash flows in increasing the operational capacities.

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Enforcement of security interest or sale of the business is our last priority and is adopted only in cases where revival of the distressed company is not feasible or where the borrower is uncooperative.