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2017•PEOPLE International Journal of Social SciencesOpen access

CORPORATE FINANCIAL DISTRESS – CORPORATE DEBT RESTRUCTURING MECHANISM IN INDIA

Kambakula Appa Rao, V. Mary Jessica

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Abstract

After Recession, corporate was not doing well. There is a situation where the company’s cash flow is not enough to pay financial obligation is called Corporate Financial Distress. External and internal factors of an environment are causes for corporate financial distress. The main objective of this paper is to know the causes for financial distress. This study finds that Delay in obtaining permissions, Short term funds used for long term purpose, Slowdown in Economy and Investments are diverted into other projects most important factors for the financial distress of companies. In this situation, Corporate Debt Restructuring Mechanism is a platform for corporate to stop winding up and come out from financial distress. This study finds that 97 out of 530 companies exited successfully come out from CDR Mechanism.

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What this paper is about

After Recession, corporate was not doing well. There is a situation where the company’s cash flow is not enough to pay financial obligation is called Corporate Financial Distress. External and internal factors of an environment are causes for corporate financial distress. The main objective of this paper is to know the causes for financial distress. This study finds that Delay in obtaining permissions, Short term funds used for long term purpose, Slowdown in Economy and Investments are diverted into other projects most important factors for the financial distress of companies. In this situation, Corporate Debt Restructuring Mechanism is a platform for corporate to stop winding up and come out from financial distress. This study finds that 97 out of 530 companies exited successfully come out from CDR Mechanism.

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Available abstract

After Recession, corporate was not doing well. There is a situation where the company’s cash flow is not enough to pay financial obligation is called Corporate Financial Distress. External and internal factors of an environment are causes for corporate financial distress. The main objective of this paper is to know the causes for financial distress. This study finds that Delay in obtaining permissions, Short term funds used for long term purpose, Slowdown in Economy and Investments are diverted into other projects most important factors for the financial distress of companies. In this situation, Corporate Debt Restructuring Mechanism is a platform for corporate to stop winding up and come out from financial distress. This study finds that 97 out of 530 companies exited successfully come out from CDR Mechanism.

Key concepts: Restructuring, Financial distress, Debt restructuring, Business, Mechanism (biology), Financial system, Debt, Corporate debt

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