2. 2 Trends in Restructuring Presented by John Doddy Partner – Debt & Capital Advisory Trends in Insolvency & Restructuring

3. 3 Contents Restructurings: Current Funding Environment Restructuring Strategies – what's happening in the market Warning Signs Outlook Trends in Insolvency & Restructuring

4. 4 Current Funding Environment Trends in Insolvency & Restructuring

5. Changing Market Significant movement from high street banks to PE and back again? Remaining Banks Lending Funds Broadhave n Credit Partners Capital Providers in Ireland Senior and Subordinated Debt and PE is now available to support transactions Long Term Players Banks Lending Funds Private Equity Loan Sales Trends in Insolvency & Restructuring 17

6. Trends in Insolvency & Restructuring6 Positive Domestic trends Values are recovering, confidence has improved

7. Trends in Insolvency & Restructuring7 Global Risk Remain Managing balance sheet risk remains key

8. 8 Effect On Restructuring Strategies Trends in Insolvency & Restructuring

9. Effective restructuring generates activity….. Trends in Insolvency & Restructuring9 New Money – 3 rd Party Investors New Money – Existing Stakeholder(s) No New Money – Existing Stakeholders

10. Bank Restructuring – Parked Debt Asset Value Implications? Asset values recovering means secured creditor can recover all or most of the parked debt Debt levels still not refinanceable on a senior debt for senior debt basis Separation of the property debt from the trading business not achieved Capital structure remains broken, significant balance sheet risk remains No recovery in equity value for borrower so no trigger for consolidation However personal recourse is avoided Parked debt allows the secured creditor to recover value but prevents real growth Current trends….. Trends in Insolvency & Restructuring22

11. Investor Return Portfolio Acquirers – Recovery Target Asset Value Implications? Refinance early in the cycle is difficult to achieve as target value is above current market value Asset values recovering means investor returns are being realised after hold period Consensual handover of the asset with agreement on recourse Generating market activity in certain asset classes e.g. CRE, pubs and hotels Expect more activity over next 2 – 3 years as Portfolio Acquirers divest Current trends contd.. Trends in Insolvency & Restructuring23

12. 12 Warning Signs & Outlook Trends in Insolvency & Restructuring

13. Warning signs For trading businesses Trends in Insolvency & Restructuring13 Significant number of SME’s yet to de-risk their balance sheets Chasing P&L profitability without considering cashflow implications Owner manager resistance to taking on 3 rd party equity Access to WC and Capex funding is restricted if debt stack is not right sized Inefficient borrowing and security structures remain in place Tired and/or unsophisticated management teams / Succession Planning Lack of scale – smaller companies will continue to find it difficult to access capital

14. Outlook Trends in Insolvency & Restructuring14 Consolidation will accelerate as smaller companies struggle to access capital Overtrading will force further restructuring Companies that recapitalise will have a competitive advantage Increased availability of debt and equity should drive activity Parked debt is effective for recovering property debt, less effective for trading businesses Zombie companies are not good for any of the stakeholders Managing balance sheet risk is key to achieving sustainable stakeholder value

15. 15 Trends in Restructuring Presented by John Doddy Partner – Debt & Capital Advisory Trends in Insolvency & Restructuring