Business Strategic Implementation-Part2
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Business Strategic Implementation-Part2






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Business Strategic Implementation-Part2 Presentation Transcript

  • 1. Corporate restructuring can lead to changealong one or more of the three directioni) Assets and Portfolioii) Capital Structureiii) Organisation and Management
  • 2. 1) Portfolio and Assets Restructuringa) Mergers & Acquisitions› Merger of two or more legal entities or companies› Purchase of assets/business of another firm as agoing concern› Substantial acquisition of share of a legal entityleading to change of control in the sameb) Divestitures› Divestment of assets/business as going concern
  • 3. › Divestment of controlling stake of a legal entityleading to change of control› Spin-off of a division or a subsidiary into a separatelegal entity› Split-off› Split-up› Equity carveout
  • 4. 2) Financial Engineering - Leading to changes inexisting capital structure› Alteration in debt-equity mix/debt-equity swaps› Issue of different classes of shares› Issue of different types of debts to meet fixedand working capital needs› Infusion of foreign debts and equity› Buyback of shares
  • 5. 3) Internal Streamlining and Business Process Re-engineering› Downsizing of head count› Cost reduction programmes› Closure of uneconomic units› Disposal of idle assets› Business process re-engineering
  • 6.  Acquisitions is capital intensive hence requirelenders. Diversification sometime destroy its value which iturn devolve the old shareholder and to regainfrom the low value it need new shareholders tobuy equity to get fund. Acquisition benefit the acquired firms rather thanacquiring firms. So as it destroy existingshareholders. To raise debt, to increase assets based capital,firm go for new shareholders by doing corporaterestructuring
  • 7.  To overcome from debt ridden financial reportorganisation go for corporate restructuring toget new shareholders to get fresh funds When organization failed to give adequateprofit margin, its share falls and to enhancethe value of share organization go forcorporate restructuring by going for mergingor acquisition, which leads to new lenders.