Key Concepts of Distressed Asset Investing & Corporate Restructuring

Key Concepts of Distressed Asset Investing & Corporate Restructuring
Identify Early Red Flags, Master Diagnostic and Valuation Techniques, and Build Robust Financial Models for Distressed Situations

Date: 17^th & 18^st August 2026
Venue: DoubleTree by Hilton Kuala Lumpur

Classroom Training

COURSE DESCRIPTION

This foundational two-day program provides finance professionals with essential skills for analysing distressed companies and evaluating restructuring opportunities.

Through a combination of real-world case studies and hands-on exercises, participants will learn to identify early warning signs of financial distress, conduct forensic analysis, and build comprehensive financial models for turnaround situations.

Course Objectives

By the end of this course, participants will be able to:
- Understand the distressed investing landscape and key investment strategies across the capital structure
- Identify root causes of corporate distress and recognize early warning signs through financial statement analysis
- Apply diagnostic frameworks including forensic accounting red flags and quality of earnings assessment
- Perform distressed-specific valuation analysis comparing liquidation value, going-concern value, and recovery scenarios
- Build financial forecasts for turnaround situations incorporating operational improvement assumptions
- Construct integrated financial models with debt capacity analysis and sustainable capital structure design
- Conduct scenario and sensitivity analysis to assess investment viability and key risk drivers
- Present investment recommendations with clear risk/return articulation

Prerequisites

Financial statement literacy: Solid understanding of income statements, balance sheets, and cash flow statements
Excel proficiency: Comfortable with formulas, cell referencing, and basic financial modeling techniques (SUM, IF, NPV, IRR functions)
Corporate finance fundamentals: Basic knowledge of valuation concepts, capital structure, and debt/equity financing
Language: The course will be delivered in English. Participants should communicate effectively in English (written and verbal)
Equipment: Laptops with Excel installed are essential for full participation in modeling exercises

AGENDA

Day One: Foundations of Distressed Investing & Diagnostic Analysis

Session 1 - Introduction to Distressed Investing & Corporate Restructuring – 2 hours

Defining distressed investing: What qualifies as ‘distressed’ across debt and equity markets
The distressed investing lifecycle: From identifying opportunities to value realization
Understanding the capital structure waterfall and recovery rates by seniority
Key investment strategies: Distressed debt, distressed equity, loan-to-own, and control positions
The ecosystem of players: Hedge funds, PE firms, special situations funds, vulture funds, and restructuring advisors
Risk-return profiles across different distressed strategies
Case Discussion: Overview of multiple distressed situations across different industries and capital structures

Group Discussion (20 minutes): Investment Strategy Selection - Teams debate the optimal distressed strategy for different investor profiles (risk tolerance, time horizon, expertise)

Tea Break – 15 minutes

Session 2 - The Anatomy of Failure: Root Causes of Distress – 1.5 hours

Case Study: Toys "R" Us (USA) - Market leader failing due to strategic missteps, e-commerce adaptation failure, and unsustainable LBO debt load
Distinguishing between internal causes (management, strategy, operations) and external causes (market shifts, macro shocks)
The ‘Growth Trap’: How rapid, unfunded expansion leads to collapse
Strategic failures: Outdated business models, failed M&A, and poor market positioning
Operational inefficiencies: Weak supply chains, high-cost structures, and poor capital allocation
The critical impact of poor corporate governance and weak board oversight
Understanding cyclical vs. structural distress in industry context
Creating a diagnostic framework to categorize and prioritize failure causes

Group Exercise (30 minutes): Root Cause Analysis - Using the ‘5 Whys’ technique, teams analyze a failed company summary to drill down from bankruptcy symptom to root cause

Lunch Break – 1 hour

Session 3 - Identifying Early Warning Signs & Financial Red Flags – 1.5 hours

Case Study: Review financials from three years prior to public distress, showing subtle deterioration patterns
Moving beyond basic profit: Analyzing trends in cash flow from operations (CFO)
The predictive power of distress models: Altman Z-Score and modern variations
Decoding the Statement of Cash Flows: Identifying reliance on financing or asset sales for survival
Analyzing working capital trends: Ballooning inventory and receivables as key red flags
Using liquidity ratios (current, quick) and leverage ratios (debt/equity, Interest Coverage) to gauge financial health
Ratio deterioration patterns that signal approaching distress
Identifying non-financial signals: Executive turnover, auditor changes, delayed filings, and covenant breaches
Building an early warning system dashboard

Group Exercise (30 minutes): Red-Flag Dashboard Construction - Teams build and present a comprehensive dashboard ranking warning signals from ‘monitor’ to ‘imminent crisis’

Tea Break – 15 minutes

Session 4 - Forensic Accounting & Quality of Earnings Analysis – 1.5 hours

Case Study: Wirecard AG (Germany) - €1.9 billion balance sheet hole, phantom profits, and complete regulatory/auditor oversight failure
Understanding ‘Quality of Earnings’ (QoE) vs. reported GAAP/IFRS earnings
Common red flags for revenue manipulation: Channel stuffing, round-tripping, fictitious transactions
Techniques for uncovering hidden liabilities and fictitious assets
The danger of opaque corporate structures and special purpose entities (SPEs)
Assessing the integrity of asset values: Goodwill, intangibles, and inventory
Working capital quality assessment: Are receivables and inventory real and collectible?
The importance of professional skepticism even with audited financials
When to bring in forensic accounting specialists

Group Exercise (30 minutes): Spot the Red Flags - Teams review manipulated financial statement notes and identify three suspicious items warranting further investigation

Day Two: Financial Analysis, Modeling & Valuation

Session 1 - Distressed Valuation Methodologies – 2 hours

Case Study: Industrial company with strong asset base, stable but low cash flow, and depressed stock price
How valuation differs in distressed situations: Why traditional DCF often fails
The valuation spectrum: Liquidation value vs. going-concern value
Asset-based valuation techniques: Net asset value (NAV), orderly liquidation value (OLV), forced liquidation value (FLV)
Building the enterprise value to liquidation value bridge
Recovery analysis and the capital structure waterfall: Estimating recovery rates by claim seniority
Benjamin Graham's ‘Margin of Safety’ principle applied to distressed investing
Determining if value lies in tangible assets or future earning power
Sum-of-the-parts (SOTP) valuation for distressed conglomerates
Understanding ‘Mr. Market’ and using volatility to your advantage

Group Exercise (40 minutes): Valuation Approach Selection - For three different distressed scenarios, teams select appropriate valuation methodologies and justify their approach

Tea Break – 15 minutes

Session 2 - Financial Forecasting in Turnaround Situations – 1.5 hours

Case Study: Global metals & mining company emerging from cyclical downturn, requiring market recovery and operational improvement assumptions
Why standard historical trend analysis fails in distressed and turnaround situations
Building a ‘turnaround case’ forecast vs. a simple ‘base case’
Top-down forecasting (market size, growth, target share) vs. bottom-up (unit volume, pricing)
Critically assessing management's assumptions and building your own independent view
Modeling the impact of operational improvements on margins and cost structure
Forecasting working capital needs and improvements (a key lever in turnarounds)
Projecting realistic capital expenditures: Maintenance vs. growth CapEx
Phasing turnaround initiatives: Quick wins vs. longer-term transformations

Group Exercise (30 minutes): Building a Turnaround Revenue Forecast - Teams build and justify a 3-year forecast incorporating market recovery and recaptured share assumptions

Lunch Break – 1 hour

Session 3 - Integrated Financial Modeling & Debt Capacity Analysis – 1.5 hours

Case Study: Cineworld (Regal Cinemas) - Valuable assets but unsustainable post-COVID capital structure
The architecture of a dynamic 3-statement financial model (Income Statement, Balance Sheet, Cash Flow)
The core principle of linking statements: Net Income, D&A, CapEx, and Working Capital
Building and automating the debt schedule within the model
Defining Debt Capacity: The maximum debt a company can service while funding operations
Using key credit ratios to analyze debt capacity: Total Debt/EBITDA, Net Debt/EBITDA, Interest Coverage
Modeling a new, sustainable capital structure within your financial model
The concept of a cash flow ‘waterfall’ to model payments to different debt tranches
Ensuring model integrity: Balancing the balance sheet and error-checking techniques

Group Exercise (30 minutes): Debt Capacity Calculation - Given model output, teams calculate maximum sustainable debt based on target leverage and coverage ratios

Tea Break – 15 minutes

Session 4 - Stress Testing, Scenario Analysis & Viability Assessment – 1.5 hours

Case Study: Continuing Cineworld analysis to stress-test assumptions and forecasts
The critical importance of stress-testing your model's key assumptions
Building and interpreting one-variable and two-variable sensitivity tables
How enterprise value and equity value change with shifts in revenue growth, margins, and multiples
Scenario Analysis: Modeling coherent ‘Base,’ ‘Upside,’ and ‘Downside’ cases
Identifying the model's most sensitive drivers (biggest business risks)
Using sensitivity analysis to set appropriate debt covenants and maintain covenant ‘headroom’
Defining true financial viability: Consistent positive cash flow, manageable debt service, path to value growth
Investment decision framework: When to proceed, restructure, or walk away

Group Exercise (30 minutes): Scenario Analysis Interpretation - Teams write investment memo recommending proceed/pass decision, highlighting key risks from downside scenario

Course Wrap-up

EXPERT COURSE DIRECTOR

Kayode Odeleye is an investment banker, entrepreneur and fund manager with over 20 years of experience across Europe, Middle East and Africa
Kayode is currently Managing Partner of 23mile Capital, a turnaround advisory fund for venture-backed startups. He also cofounded Caena, an investment tech startup for VCs and SMEs.
Over the past four years, Kayode has run courses for dozens of clients across financial restructuring, generative AI, corporate finance credit analysis and entrepreneurial finance.
Before founding Caena, he was an investment banker with Standard Chartered Bank where he worked on complex transactions across Sub-Saharan Africa worth over $5 billion including mergers and acquisitions (M&A), private equity funds and Capex financings in industries ranging from private equity, manufacturing and infrastructure – especially telecoms towers.
He holds an MSc International Management from University of Liverpool, Advanced Executive Certificate from MIT Sloan and an undergraduate degree in Mechanical Engineering from Obafemi Awolowo University, Nigeria.

WHO SHOULD ATTEND?

You Should Take This Course…

This course is designed for finance professionals seeking to build foundational skills in distressed investing and restructuring, including:
- Junior to mid-level analysts in special situations, distressed debt, or turnaround funds
- Credit analysts in commercial and investment banks evaluating stressed or distressed credits
- Corporate finance professionals in restructuring advisory or transaction services
- Private equity and hedge fund analysts beginning to focus on distressed opportunities
- Investment banking analysts in restructuring or special situations groups
- Management consultants working on turnaround and performance improvement projects
- In-house corporate development professionals dealing with portfolio company challenges
- This course is ideal preparation for the follow-on program, Advanced Techniques in Distressed Asset Investing & Corporate Restructuring (19^th & 20^th August)

REGISTRATION

*Please note there is a fee for attending this program. Please contact us for more details.

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Before completing this registration form please read and understand our booking and cancellation policy. Thank you.

Booking, Payment and Cancellation Policy – important, please read carefully

By completing, signing and revised, sent separately us this registration form you are conﬁrming participants on the program. You are also conﬁrming your understanding of our Booking, Payment and Cancellation Policy.

Cancellation Policy: If participants cannot attend the program, replacement participants are always welcome. Otherwise, participants must notify us any of cancellations or requests to transfer to a diﬀerent program at least 14 days before the program date to be eligible for a refund, less a 5% administration on fee. Participants who cancel within 14 days of the program start date are liable to pay the full program fee and no refunds will be given. Instead fees will be converted to a REDmoney Seminars voucher equivalent to the original fee, less a 10% administration charge. This voucher is transferable within your organization and must be redeemed within one year of issue or become void. If a program is postponed for whatever reason registrations and fees will be automatically transferred to the new program date. Participants who wish to transfer to a diﬀerent program will be subject to the same terms as above and charged any diﬀerence in fees. No refunds or program vouchers will be issued for a no-show.
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FEE

Fee per participant: RM5,900/US$1,450

Please note that the Ringgit price is applicable to Malaysia-domiciled participants only. Discounts are available for group bookings. Please contact us for more details.

IN-HOUSE/GROUP TRAINING

If you are looking for an in-house training program or wish to send a group to an existing public program, kindly please contact Andrew Tebbutt at [email protected] or +603 2162 7802.
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