Special Purpose Vehicle In Corporate Restructuring

Abhishek Nair, KIIT School of Law, Bhubaneswar, Odisha

ABSTRACT

The Study analyses the efficiency of Special Purpose Vehicles (SPVs) with a focus on two aspects: the Construction Industry and corporate Restructuring. Special Purpose vehicles (SPVs) are legal entities that are frequently used in large-scale construction projects. Construction Industry is an essential sector that has a significant impact on the growth of a nation. Many companies have strong interests in the construction industry as it is said to be an investment-driven sector. On a general basis, construction projects require a sizable amount of funding which is a major problem faced by corporate entities often. Here SPVs act as the most important tools in the completion of such large-scale projects.

Specific transactions such as project financing and Public-Private Partnerships are also supported by SPVs. Although SPVs are often used little is known about their significance and functioning. This Paper demonstrates the relevance of SPVs in corporate restructuring as well as their utility in the construction industry.

Special Purpose Vehicles (SPVs) are considered an alternative tool or instrument which are often used in Construction contracts. This article explores the connection, demonstrating fragmentation and uncertainty as well as conscious efforts to productively integrate SPVs and the Construction Industry. The paper aims to introduce Special Vehicles, their role in corporate restructuring as well as their utilization in construction contracts but also the issues and risks involved in the use of SPVs along with case laws. It describes the hybrid nature of SPVs, being between different corporations, and discusses its implications in construction projects.