BY PAUL TENTENA
Nigel Smith, the KPMG Head of Debt Advisory and Restructuring in East Africa.
KAMPALA, UGANDA- Nigel Smith, the KPMG Head of Debt Advisory and Restructuring in East Africa has said some auditors and banks in Uganda are putting businesses out of work (winding up businesses) yet they can be rescued by restructuring of loans for profitability.
Smith, who was in Kampala to assist lenders and corporate borrowers to save companies, while reducing bank provisions and increase banks’ profits without legal action or enforcement said failure of a company to achieve its own forecasted trading performance could result in an under-performing loan in the near future but remedial action can prevent a default and legal action.
In finance, a default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity.
“KPMG recommends lenders proactively investigate these companies before provision is required,” said Smith.
He said corporate borrowers who are facing a cash squeeze gain help to develop a robust business plan in which one can show how all stakeholders can realistically be repaid without the need for lenders to take enforcement action.
KPMG is a professional service company and one of the big four auditors, along with Deloitte, Ernst and Young (EY) and PricewaterhouseCoopers (PwC).
Seated in Amstelveen, the Netherlands, KPMG employs 189,000 people and has three lines of services: financial audit, tax and advisory. Its tax and advisory services are further divided into various service groups.
The name “KPMG” stands for “Klynveld Peat Marwick Goerdeler.” It was chosen when KMG (Klynveld Main Goerdeler) merged with Peat Marwick.