Restructuring Projects in Financial Distress

International Journal of Business and Education, Vol. 2 No. 5 May 2014

10 Pages Posted: 2 May 2013 Last revised: 3 Mar 2015

See all articles by John Kwaku Mensah Mawutor

John Kwaku Mensah Mawutor

University of Professional Studies, Accra (UPSA)

Date Written: March 3, 2015

Abstract

The recent paradigm shift in financing capital intensive projects by private and public entities from traditional corporate finance schemes with project finance schemes has witnessed a massive surge in the corporate world. However, a number of such projects are either plunged into financial distress at preliminary phases or operational phases. To address this issue, this paper examined the general overview of financially distressed project by reviewing adequate literature regarding project finance and financial distress, outlining the major signs of financial distress associated with projects and recommend suitable solutions to projects engulfed in financial distress. To achieve this goal, capital structural reforms in the area of increasing equity capital requirement is advisable in view of the existing arrangement which allows equit y investment of 10% to 20% in most cases. Ascertaining optimal capital structure that would enable the avoidance of financial distress requires further research.

Keywords: Distress, Financial, Capital structure, Corporate finance, Project finance

Suggested Citation

Mawutor, John Kwaku Mensah, Restructuring Projects in Financial Distress (March 3, 2015). International Journal of Business and Education, Vol. 2 No. 5 May 2014. Available at SSRN: https://ssrn.com/abstract=2258812 or http://dx.doi.org/10.2139/ssrn.2258812

John Kwaku Mensah Mawutor (Contact Author)

University of Professional Studies, Accra (UPSA) ( email )

P.O.Box 149
P.O.Box 1381
Accra
Ghana
233243287242 (Phone)

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