Due to the Covid-19 pandemic, consolidation transactions are likely to increase in India and globally as many businesses may not have the financial wherewithal to survive the crisis and will look to sell out. At the same time, there will be buyers (“Buyer”) who may have enough cash to be deployed in taking over distressed businesses. This article discusses some of the issues which the Buyer should keep in mind while buying distressed assets.

As the economic turbulence associated with the downturn in commodity prices and the outbreak of COVID-19 continues, many energy companies may find their debt trading at significant discounts. For companies trying to manage liability and liquidity, this presents an opportunity to selectively repurchase debt and de-lever at prices well below par. Energy companies that are well-situated to capitalize on this window should carefully consider the corporate and tax ramifications debt buybacks present.

Corporate Considerations