Capital restructuring aims to reduce the cost of capital and maximize the shareholders wealth. Capital Structure Here the Capital Structure is worked out i.e., the capital required, raising of the capital, debt-equity ratio, issue of shares and debentures, working capital, fixed capital requirements, etc. Determination of optimum capital structure conforming to legal requirements. – Getting consent of controller of Capital issues for capitalization of reserves by way of issuing bonus shares. – Here the Capital Structure is worked out i.e., the capital required, raising of the capital, debt-equity ratio, issue of shares and debentures, working capital, fixed capital requirements

1. z
FUNCTIONS
PERFORMED BY
MERCHANT
BANKERS
CAPITAL
RESTRUCTING

2. z CAPITAL RESTRUCTURING
 Capital restructuring aims to reduce the cost of capital and maximize the
shareholders wealth.
 Capital Structure Here the Capital Structure is worked out i.e., the capital
required, raising of the capital, debt-equity ratio, issue of shares and
debentures, working capital, fixed capital requirements, etc.

3. z
CAPITAL RESTRUCTURING
 Determination of optimum capital structure conforming to legal
requirements. – Getting consent of controller of Capital issues for
capitalization of reserves by way of issuing bonus shares. – Here the
Capital Structure is worked out i.e., the capital required, raising of the
capital, debt-equity ratio, issue of shares and debentures, working
capital, fixed capital requirements

4. z
CAPITAL RESTRUCTURING
 Capital restructuring is a corporate operation aimed at changing the ratio
of equity and debt in a firm's capital structure. It is usually done in
response to a crisis such as:
 Changing market conditions.
 Hostile takeover bid.
 Bankruptcy.

5. z
SERVICES
 Merchant banks render different capital restructuring services to the
corporate units depending upon the circumstances a particular unit is
facing.
It may include the following services:
(i) Examination of the capital structure of corporate unit to decide the extent of
capitalization.
(ii) In case of bonus issue, it helps the clients in preparing the Memorandum
for Controller of Capital Issue (CCI) and in obtaining his consent.

6. z
SERVICES (CONTD)
(iii) For companies governed by Foreign Exchange Regulation Act (FERA), merchant
bankers suggest an alternative capital structure which is in conformity with the legal
requirements. It also advises company on disinvestment issues to their maximum
advantage.
(iv) For sick units, it suggests appropriate capital structure which will help the unit in
revival. It also advise as to the extent and means of bringing fresh capital into
business.

7. z
SERVICES (CONTD)
(v) Merchant bankers also render advise on mergers, takeovers and
amalgamations and help in their implementation.
(vi) Merchant bankers also identify the areas of diversification of the existing
production systems and suggest various strategies to widen and restructure the
capital base accordingly

8. z
CAPITAL RESTRUCTURING
 Before capital restructuring is implemented, the company must carefully
analyze its liquidity and capital structure. This means that financial modeling,
as well as financial statement valuation and analysis, are essential.

9. THANK YOU.