Scheme of Arrangement

What is Scheme of Arrangement?

Scheme of Arrangement (“Scheme”) is an option available for companies in financial difficulties. A Scheme allows the company to restructure its debts.

A Scheme is where the company and its creditors come to an agreement whether by way of varying the right of its creditors or proposed repayment plans or waiving a portion of the debts and etc (where appropriate) to assist the company in implementing its turnaround plan.

A Scheme is a Court Approved Agreement between the company, its shareholders and its creditors. Upon approval by the creditors and sanction of the Court, the Scheme binds all creditors.

Why Scheme of Arrangement?

The Scheme allows companies in financial distress to enter into an agreement with its creditors with aim of continuing business and potentially a higher recovery to its creditors rather than being wound-up now.

For companies that are facing threat of being wound-up, a restraining order may be applied by the company to enable its directors to focus on rescuing the company.

Would the creditors agreed with the Scheme?

The situation faced by most creditors is whether it is worth giving the company a chance of survival. Thus, in order for the creditors to agree with the Scheme, the company would have to convince its creditors that the company still has a viable business (whether via secured contracts, or injection of new fund and etc).

How can VCCA Assist?

VC CORPORATE ADVISORY (“VCCA”) is a member firm of Malaysian Institute of Accountants (“MIA”) and our partners are licensed insolvency practitioners approved by the Ministry of Finance.

Together with our team of experienced chartered accountants, VCCA work and liaise with various professionals such as lawyer, banks/financial institutions, government authorities and other related professionals to achieve the best possible solution and highest possible recovery for all stakeholders throughout the insolvency, restructuring, receivership or corporate rescue process.

Our team of highly qualified professionals has worked throughout various cases across different industries and assisted numerous companies in financial distress. We would be able to assist you.

For more information contact us at +603-6734 9838 or email us at info@vcca.my