A Path for Optimizing Assets in the Midst of Market Change

Abstract

As more and more energy project owners default on their debt obligations, project creditors are faced with the major task of managing the transfer of asset ownership and assuming the new role of owner. This transition is neither easy nor intuitive. However, it can be accomplished successfully, through the following process: 1) concurrently restructure the debt and determine short-, medium-, and long-term objectives; 2) determine the correct framework for the new project organization; 3) choose the team; and 4) optimize the asset. When faced with asset foreclosure and restructuring, creditors need to look beyond the short-term obstacles. With a carefully selected team and new agreements supporting them, and guided by a set of clear objectives that can be adapted as the market shifts, creditors can optimize their assets.