Financial stability after the moratorium? Yes, it is possible.

Author: Tímea Kovács

September 30, 2021 will be an important date for many, as the quiet period when there was no obligation to pay the principal and interest obligations under the contract will end, i.e. for the companies that have lived by the Government – to our current knowledge, September 30, 2021 with a moratorium on payments.

A company that was not overly financially shaken by the pandemic could have made a prudent decision by opt-out i.e., under the moratorium, undertook to perform the debt service under the original contract.

But what future do those who remained in the moratorium face and try to survive the loss of revenue caused by the pandemic?

As a first step, they will receive a statement from their bank after the end date, which should show that the interest accrued during the moratorium has been spread evenly over the remaining term each year; and, given that the monthly installments may not be higher than before the moratorium period, how much the maturity of their loans has been extended.

For corporate loans , it’s definitely worth reviewing your company’s funding structure, revenue and cost structure, short- and long-term resources for your company’s fixed and current assets, refinancing high-priced loans, or restructuring problem loans.

If you are a party to a medium- or even long-term project loan agreement , whether as a debtor, guarantor, sponsor, and / or owner, we encourage you to review your revenue-generating agreements as soon as possible; based on your updated financial model, to decide on the fulfillment of the financial undertakings specified in the contract, to decide on the updated valuation of the property, to renegotiate the revenue and, if applicable, the expenditure / operating contracts , strong new ones, possible fundraising .

Let’s prepare together for possible scenarios and remedies now before our bank reports a breach of contract!