Letters: It depends on the case

Restructuring means loan is spread over a longer period of time, often at current rate of interest

The editorial, “Short cuts won’t work” (March 9), says, “It is true that debt restructuring that makes a company sustainable is a good idea but using it to kick the can down the road will obviously not help.” This observation assumes that restructuring is the same as kicking the can down the road. That is not correct; they are not the same. 

Kicking the can down the road means that you delay a decision in the hope that the problem or issue will go away or somebody else will make the decision later. 

Restructuring means the loan is spread over a longer period of time, often at the current rate of interest, so that the loan is paid in a less rigorous manner, making the company survive during a bad time. 

As an independent director in several companies for 11 years after my retirement, I know of cases where restructuring of a loan has made the company survive. It is not a case of delaying the decision, but taking the right decision in a deserving case.

The same thing is done by the government in deserving cases, but not often, by giving instalments so that some money is recovered rather than nothing at all. So, restructuring and instalments are good measures in deserving cases.

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