Corporate restructuring is an action taken by the corporate entity to modify its capital structure or its operations significantly. Generally, corporate restructuring happens when a corporate entity is experiencing significant problems and is in financial jeopardy.
- Mergers & Acquisitions. Integrating the administration, operations, technology and/or products of two firms.
- Legal. Changing the legal structure of a firm such as ownership structure. …
- Financial. …
- Turnaround. …
- Repositioning. …
- Cost Restructuring. …
- Divestment. …
Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring.
Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations.
The basic nature of restructuring is a zero-sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation.
- An Objective based on the Outsider's Perspective. Especially true for small to mid-size companies, owners and senior management normally have invested significant time, energy, and resources into their companies. ...
- Accomplishing Short-Term Goals. ...
- Leveraging New Skills. ...
- Outside Market Knowledge
- The luxury of having time to Plan
Corporate debt restructuring is the reorganization of companies’ outstanding liabilities. It is generally a mechanism used by companies which are facing difficulties in repaying their debts. In the process of restructuring, the credit obligations are spread out over longer duration with smaller payments. This allows company’s ability to meet debt obligations. Also, as part of process, some creditors may agree to exchange debt for some portion of equity. It is based on the principle that restructuring facilities available to companies in a timely and transparent matter goes a long way in ensuring their viability which is sometimes threatened by internal and external factors. This process tries to resolve the difficulties faced by the corporate sector and enables them to become viable again.
- Ensure the company has enough liquidity to operate during implementation of a complete restructuring
- Produce accurate working capital forecasts
- Provide open and clear lines of communication with creditors who mostly control the company’s ability to raise financing
- Update detailed business plan and considerations
- Our Strategy
Initial Phase: 1st meeting and clarification
Understanding the Problems and Objectives
This first phase deals with the initial contact with the client about the problems and objectives , determine and explore the clients expectations and list / specify the options and how to get started.
Second Phase: Assessment and Planning
Plan and Identify Solutions for Implementation
Diagnose the identified problems and focus on the objectives for implementation based on the data analyzed and situations that arise. Planning Phase for implementing the steps to success.
Third Phase: Deliver & Measure Results
Address the Problem and Interventions
This step is all about implementing the processes, tools, coalitions, solutions, etc to solve organizational issues and further track and evaluate the results to produce more valuable than delivered.