@article {Srivastavajsf.2018.1.068, author = {Vikas Srivastava and Surya Dashottar}, title = {Turning Around Distressed Project Finance Assets in India: What More Needs to Be Done?}, elocation-id = {jsf.2018.1.068}, year = {2018}, doi = {10.3905/jsf.2018.1.068}, publisher = {Institutional Investor Journals Umbrella}, abstract = {With the Insolvency and Bankruptcy code firmly in place, India{\textquoteright}s distressed project finance assets are turning out to be attractive to institutional investors. Project finance assets need asset and deal-specific financing solutions in order to achieve successful turnarounds. The turnaround solution must ensure optimum risk allocation and mitigation leading to the build-up of future cash flows. This will, in turn, lead to deleveraging of stressed balance sheets. The authors present a conceptual model and argue that even now the political and regulatory risks for infrastructure project loans in India have not been completely mitigated. This has resulted in a situation of a debt overhang, wherein even economically viable projects may not attract fresh funding. To address this, the article suggests the possible use of {\textquotedblleft}priority funding structures,{\textquotedblright} where existing lenders cede charge on the assets in favor of a new lender as a way to reduce the cost of debt and unlock shareholder value. This solution will also ensure that the restructuring package is properly priced (from project finance lender{\textquoteright}s perspective), resulting in the efficiency and viability of the restructured asset.}, issn = {1551-9783}, URL = {https://jsf.pm-research.com/content/early/2018/09/20/jsf.2018.1.068}, eprint = {https://jsf.pm-research.com/content/early/2018/09/20/jsf.2018.1.068.full.pdf}, journal = {The Journal of Structured Finance} }