Portfolio, Investment & Restructuring
Workout Valuation and Recovery Planning
Summary
Workout valuation estimates the proceeds achievable from collateral, continued operations or reorganisation after borrower distress.
Why this matters in ship finance
Recovery values can diverge sharply from going-concern broker quotations when sale time and enforcement conditions are constrained.
The concept
A recovery assessment combines vessel market evidence, costs of arrest/maintenance, creditor priority, jurisdiction, time to sale and net cash collection.
How it is used in practice
Calculate net present recovery proceeds under consensual sale, chartered operation, judicial enforcement and restructuring pathways.
Practical issues
Do not treat fair market value as immediate net recovery. Maritime liens and local procedure can change ranking and cost.
How ShipFinance.ai uses this concept
Calculate a transparent recovery waterfall and identify legal and market sensitivity drivers.
Key takeaways
- Net recovery differs from headline vessel value.
- Enforcement time and costs must be modelled.
- Alternative recovery routes can preserve value.