The regulation of funding troubled projects

Hani M. Mounes Awad () and Asmaa Saad Hussien ()
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Hani M. Mounes Awad: Northern Border University, Saudi Arabia
Asmaa Saad Hussien: Northern Border University, Saudi Arabia

Access Journal, 2024, vol. 5, issue 2, 321-340

Abstract: Objectives: A project may suffer a financial crisis; the project management shall seek to provide the necessary financial liquidity to overcome the state of default that has affected this project. Therefore, companies resort to seeking financing sources. However, the search for financing sources under the description of the project as Troubled is a very difficult task. How can a financier be convinced to finance a Troubled project?. Methods/Approach: the study followed the descriptive analytical comparative approach. The descriptive approach will be used to address the means of recovering the projects from the difficulties, and to analyze the legal articles governing this financing, and thus to address its controls, the comparative approach will be relied upon, where the financing of Troubled projects in the American Bankruptcy Law will be addressed, and thus the comparative approach will be used. Results: the study addressed the concept of a Troubled project, the regulations for granting guaranteed financing, in addition to cross-collateralization. Considering that guarantees are the basis of financing, a lender will not finance without guarantees, especially if the project to which the loan is being provided is a Troubled project. Conclusions: The study reached several recommendations, including the establishment of a Troubled projects support fund, which would be funded by contributions from the companies themselves and would be under the authority of the government. In addition, establishing a government fund to support Troubled projects, with financing priorities divided according to the importance of the project to the economy. These loans would be interest-free.

Keywords: Troubled projects; Stalled Project; Funding Project; Cross-Collateralization; Funding Guaranteed (search for similar items in EconPapers)
JEL-codes: K2 K4 O57 P5 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aip:access:v:5:y:2024:i:2:p:321-340

DOI: 10.46656/access.2024.5.2(9)

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