Paper Limited is a major player in the Manufacturing industry. For the past five years the companys performance worsened resulting in operating losses.

The balance sheet of the company as at 30 June, 2022 is shown below:

Assets	Ghc'm	Ghc'm	Ghc'm
	Cost	Depreciation	NBV
Goodwill	180	(30)	150
Patent	330		330
Land and buildings	1,650	(33)	1,617
Plant and equipment	820	(120)	700
Motor vehicles	560	(250)	310
Furniture and fixtures	210	(90)	120
	3,750	(523)	3,227
Investments			890
			4,117
Current Assets:
Stocks		340
Trade debtors		250
		590
Current liabilities:
Bank overdraft		(355)
Trade creditors		(500)
Subordinated Loan		(210)
Sundry Creditors		(180)
		(1,245)
Net current assets			(655)
15% Long-term loan			(280)
Net Assets			3,182
Financed by:
Ordinary shares (200,000)			2,500
10% Preference Shares (60,000)			1,200
Capital surplus			50
Income surplus			(568)
			3,182

As the financial controller of the company, the directors have sought your advice in proposing a scheme of reorganization to turn around the company in the ensuing years. The following information is relevant:

The providers of the long term loan have demanded that the company pays the interest on the loan, which has been in arrears for the past four years.

Because of the companys strategic nature in the economy, Hoe Finance Company has signed a memorandum of understanding to tend the company Ghc50 million if the reorganization scheme is devised and accepted by the existing stakeholders

The preference dividend is in arrears for three years.

Book limited, which owed paper limited an amount of GHc 100 million, is in receivership and according to the receiver, Books creditors are guaranteed 20% of their exposure. Out of the remaining debtors 20% is estimated to be irrecoverable.

Pen bank limited has requested repayment of the overdraft.

Goodwill is to be written off and the patent is valued at 40% of its carrying amount.

The investment is to be sold at a carrying amount and the value of stock is estimated at GHc 140 million.

Land and buildings are valued at Ghc 1,900 million, motor vehicle at Ghc 400 million, plant and equipment at Ghc650 million. Additional investment in plant and equipment to the tune of Ghc 530 million is required.

The ratio of current assets to trade creditors is to be pegged at 2:5:1

The providers of the subordinated debt have agreed to waive a third of the outstanding amount.

Required:

Propose a scheme of reorganization, which will be acceptable to all stakeholders.

Prepare a balance sheet, after the reorganization

Comment briefly on the scheme you have proposed.