A company that cannot meet its debt service rarely fails for want of a business. It fails because lenders act separately, information arrives late and each creditor protects its own position at the expense of the whole. Debt restructuring replaces that race with a single, orderly process: one set of numbers, one negotiation, one agreed plan. Done early, it preserves value that enforcement and liquidation destroy, for the owners and for the lenders alike.
In Lebanon the process has changed since 2019. Borrowers now often face lenders that are themselves insolvent, legal uncertainty over the currency in which a loan should be repaid and at what rate, and collateral that banks release slowly. Across the wider region, higher interest rates and tighter bank appetite have exposed companies that grew on short-term revolving credit. In both settings a settlement must be designed so that it holds under conditions that may not improve soon.
Orion acts for the company, or at its request with its creditors, from the first standstill to the implementation of the agreement. The aim is a capital structure the business can carry from its own cash flow, an operational road map that makes the new schedule credible, and documentation that both sides can account for properly. Every mandate is first classified on Orion's five-level scale of difficulty and by the company's situation, which together set the scope, the team and the timetable.
A restructuring follows a recognised sequence. The timings below are indicative and depend on the number of creditors, the quality of the company's records and the level of difficulty assigned at the outset.
The stages below describe a typical mandate and reflect best practice in the market. Every engagement is scoped to the case at hand: stages may be combined, re-ordered, shortened or omitted, and timings depend on the company, its counterparties and the regulatory setting.
Stabilise the position so that no creditor acts alone while the facts are established.
The first task is to stop the clock. The company appoints its advisor, identifies every creditor and approaches the main lenders with a request for a standstill: a short, written undertaking not to accelerate, enforce or call guarantees for an agreed period, usually in exchange for information and good conduct by the borrower. Existing facilities are held at current levels and no creditor improves its position at the expense of the others. The common pitfall is to negotiate bilaterally with whichever bank presses hardest; a single preferential settlement can make the wider agreement impossible.
Establish, on numbers all parties can rely on, why the company is in difficulty and whether the core business is viable.
An independent business review rebuilds the balance sheet and income statement from source records, separates the operating business from the legacy debt and identifies the causes of distress: margins, working capital, overexpansion, currency mismatch or governance. It tests management's plan against market evidence and states plainly which activities create cash and which consume it. Lenders give weight to this work precisely because it is independent of both sides. The pitfall it avoids is a negotiation conducted on management accounts that the creditors do not trust, which leads to repeated requests for information and loss of momentum.
Show how much cash the company has, how long it lasts and what debt it can carry.
Two forecasts run side by side. The 13-week cash flow forecast, built on receipts and payments rather than accruals, shows the short-term liquidity position and is updated weekly against actuals so that creditors can see its reliability. The medium-term business plan, typically over three to five years, establishes sustainable debt capacity under base and downside cases. Together they answer the question every lender will ask: how much can this business repay, and when. Forecasts prepared to show the answer the company would like, rather than the one the cash supports, are the single most frequent reason restructurings fail and are reopened.
Give creditors a structure and an information flow that allow them to decide collectively.
Where there are several lenders, they are encouraged to organise: a coordinating bank or a small creditors' committee, with advisors of their own where the size of the case justifies it. The company provides the same information to all creditors at the same time, through a data room and regular meetings, and treats creditors of the same rank equally. This reflects the principles for multi-creditor workouts long promoted by the international insolvency profession. The pitfall is selective disclosure; a creditor that learns it was told less than another will rarely support the final plan.
Translate debt capacity into a concrete proposal that each class of creditor can evaluate.
The term sheet allocates the sustainable debt and the rest of the claims across the available instruments: rescheduling of maturities, interest relief or capitalisation, partial write-off, swaps of debt for real estate or other assets, conversion of debt into equity or quasi-equity, and the new money required, with its priority. It sets covenants, reporting, governance changes and the treatment of security and guarantees. Where repayment currency is in dispute, it fixes the currency and conversion basis explicitly. Each creditor is shown its expected recovery against the alternative of enforcement or liquidation; a proposal that cannot show that comparison is unlikely to be approved.
Reach agreement in principle with the creditors and obtain their internal approvals.
Negotiation moves from the committee to each creditor's credit and risk functions, which must approve the terms internally and assess their own provisioning and classification consequences. Shareholders are asked to contribute in proportion to the sacrifice requested of lenders, whether by fresh equity, guarantees or dilution. The advisor keeps the parties to the timetable, tests counter-proposals against the cash flow forecast and records concessions as they are agreed. The common pitfall is to concede on the schedule while leaving the underlying business unchanged, producing an agreement that defers the problem rather than resolving it.
Turn the agreed terms into binding, enforceable documents and satisfy the conditions to closing.
Legal counsel for each side drafts the restructuring agreement, amended facility documents, security releases and new security, swap and transfer documents, and any corporate resolutions or capital increase. Asset swaps require valuation, title checks and registration; equity conversions require shareholder and, where applicable, regulatory approval. The advisor coordinates the workstreams and checks that the documents reflect the term sheet and the forecast. Attention to accounting treatment matters: both borrower and lender must be able to recognise the modification properly under IFRS 9. Closings slip most often on conditions precedent that were identified late.
Ensure that the company delivers the plan and that creditors can see it doing so.
A restructuring is only as good as its implementation. The company reports to creditors on the agreed schedule: cash against forecast, covenant compliance, progress on asset disposals and on the operational road map. An independent monitor, or a board seat where the level of difficulty warrants it, gives lenders confidence and gives management early warning. Deviations are discussed before they become defaults, with pre-agreed mechanisms for amendment. Without this discipline restructured companies tend to return to their lenders, on weaker terms than before.
Every month of delay consumes cash and reduces the instruments available. A company that approaches its lenders while it can still service part of its debt negotiates from a stronger position than one already in default. The standstill is easier to obtain, creditors are more willing to provide new money, and value is preserved.
Creditors and owners will argue about many things; they should not argue about the facts. An independent review and a cash flow forecast reconciled weekly against actuals give every party the same basis for decision and shorten the negotiation more than any other single measure.
Creditors of the same rank receive the same information and the same treatment, and shareholders contribute in proportion to what lenders are asked to give up. A plan that appears to transfer value from creditors to owners, or from one lender to another, will not obtain the approvals it needs.
Where lenders are themselves impaired and the currency of repayment is contested, terms must be explicit on currency, conversion basis and the release of collateral, and must remain serviceable under a downside case. Orion draws on its partners' work with the central bank on loan classification and debt-to-property swaps.
News of a restructuring can trigger supplier withdrawal, customer loss and creditor runs. Information is shared under written confidentiality undertakings, on a need-to-know basis, and the process is conducted discreetly until the agreement is signed. Orion does not disclose its mandates, its clients or their outcomes.
Every Orion mandate is conducted under a strict non-disclosure agreement. We do not publish client names, transactions or outcomes, and we never use a client as a reference without written consent. What we can share openly is how we work — and the research on which our advice rests.
A first conversation with a partner is confidential and without commitment.
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