Restructuring

Question 1

What are the possible reasons that a company needs restructuring?

Answer 1

1. product has become obsolete
2. decline in industry/market
3. poor investments and development
4. lack of innovation
5. disorganised and poor management
6. poor M&A in the past
7. lots of leverage and debt

Question 2

When is restructuring appropriate?

Answer 2

if the process is viable. Benefits outweigh the risk, 70% of the debt can be fixed.

Question 3

The key ways to start restructuring?

Answer 3

Cleaning up the balance sheet is the most important
raise capital if possible.
1. Sell the non-core assets - asset restructuring.
2. lower the capital expenditure
3. cut the costs - operating costs
4. partial sales of arms of the business

Question 4

Liability side restructuring?

Answer 4

• suspension of interest
• write-off
• convertible bonds
• D/E swaps