Distressed companies that remain going concerns present unique challenges for valuation. Traditional methods like standard DCF (discounted cash flow) must be adapted to account for extreme uncertainty, potential restructuring, and the risk of business failure truncating the cash flows. Academic research and industry practice converge on the need for scenario-based analysis and careful risk adjustment when valuing such firms. Below we review how IT systems and agentic AI can support a DCF analysis for distressed companies under two information scenarios: full information with forward looking business plans vs. limited information based on historical data. We discuss how to determine a company’s debt capacity using key performance indicators (KPIs), and outline an algorithm for structuring a refinancing plan that maximises debt recovery while ensuring the company can afford future debt service. Our focus is general across sectors with an emphasis on European contexts illustrating the potential use of AI at each step of the restructuring process.

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