In our first article in this series, we looked at the mystery of why apparently solvent companies end up heavily devalued and paying almost nothing to their unsecured creditors if they have the misfortune to file for insolvency. Now we dive into more detail into the conflict between book values and real life realisations in an insolvency context, starting with a
Those who run and manage businesses are familiar with the two traditional sources of funding. They understand balance sheet finance, whether it is debt from lenders or equity from shareholders. They also live with the vagaries of the liquidity (positive or more usually negative) that is generated from trading and operations, in the form of the difference between what they
The Coronavirus Business Interruption Loan Scheme (CBILS Scheme) One of the three main pandemic loan mechanisms, the CBIL Scheme, ran from March 2020 to March 2021. Lenders advanced a total of £26.4bn to 109,877 borrowers at an average loan value of £240,000. The maximum loan was £5m and the government provided a guarantee of 80% of the debt. The lender
The government’s cut in support for businesses on their energy costs announced in the new Energy Bills Discount Scheme was expected, but the scale of it has left some high energy use sectors gasping. Overall, the new arrangements mean an 85% cut in the discounts for the business community from £18bn in six months under the old scheme to only
As energy prices disappeared off the chart in the wake of the Ukraine conflict, the government opened its coffers last autumn and wrote what has turned out to be an £18bn cheque to the UK business community, providing a desperately needed lifeline until the end of March 2023. Speculation has been rife for weeks that the Energy Bill Relief Scheme
The futility of predicting 2022 Even Nostradamus would have struggled to get his economic forecasts right for 2022, although there were straws in the winter wind with consumer inflation already heading north at 5.4% as we started the year and Russian troops were massing on the Ukrainian border. Oil prices had already gained 50% in 2021, so surely it would
