On 15 June 2020, the Monetary Authority of Singapore (MAS) poll of 23 economists and analysts indicates that Singapore’s economy will likely shrink by 11.8% in Q2 2020 on a year-on-year basis. Overall, GDP is estimated to contract 5.8% in 2020. COVID-19 and trade tensions have upended the economy and put many corporations in survival mode. 3,800 companies closed down in April 2020 alone, a sign of the severe strain on the Singapore economy wrought by the virus. Hard times however, do not mean directors should easily disregard their duties and legal obligations to the company as a whole.

The COVID-19 pandemic has left many businesses badly affected, particularly those in industries such as leisure, travel and F&B, as consumer spending plummets. This article will discuss how companies can restructure businesses and operations to reduce costs. Companies facing financial difficulties or tremendous cost pressures may consider harnessing these out-of-court options to stay afloat and to possibly avoid insolvency proceedings.

The COVID-19 pandemic has led to a significant strain in the global markets. As "stay-at-home" orders are implemented globally, many economies have closed off, which has severely impacted numerous businesses. Inevitably, some companies have liquidated and many others are at risk of insolvency.

In situations when financing is tight, such as during recessions, corporations face difficulty refinancing existing debt or capitalising their businesses.

When faced with such realities, distressed corporations often turn to M&A transactions as a means of generating capital and exiting from non-performing businesses. In such situations, M&A transactions typically take the form of asset sales rather than mergers or share sales.