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| Corporate Restructuring |
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| Introduction |
- There are primarily two ways of growth of business organization, i.e.
- 1. Organic Growth
A company is said to be growing organically when the growth is through the internal sources without change in the corporate entity. Organic growth can be through capital restructuring or business restructuring.
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2. Inorganic growth
Inorganic growth is the rate of growth of business by increasing output and business reach by acquiring new businesses by way of mergers, acquisitions and takeovers and other corporate restructuring Strategies that may create a change in the corporate entity.
- Corporate restructuring is the process of significantly changing a company's business model, management team or financial structure to address challenges and increase shareholder value. Corporate restructuring is an inorganic growth strategy.
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| What is its aim? |
| Corporate Restructuring aims at different things at different times for different companies and the single common objective in every restructuring exercise is to eliminate the disadvantages and combine the advantages. |
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| Needs for undertaking Corporate Restructuring |
The various needs for undertaking a Corporate Restructuring exercise are as follows:
- Market Leadership
- Limiting Competition
- Improving Economies of Scale - consolidation and economies of scale by expansion and diversion to exploit extended domestic and global markets.
- Synergies - to focus on core strengths, operational synergy and efficient allocation of managerial capabilities and infrastructure.
- Operating Economies
- Financial & Tax Benefits
- Acquiring a new product or brand
- Diversifying the portfolio
- Strategic Integration
- Revival and rehabilitation of a sick unit by adjusting losses of the sick unit with profits of a healthy company.
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| Strategies for the Corporate Restructuring |
There are so many strategies for the structuring of a corporate such as:
- Merger (Horizontal as well as Vertical), Reverse Merger & Demerger
- Post Merger Re-organization such as Re-visiting internal processes, Re-allocation of people, Re-visiting past decisions/Govt. approvals/Compliances etc.
- Takeover/Acquisition
- Joint Venture (Project based as well as Functional based)
- Strategic Alliance
- Disinvestment/Slump Sale
- Franchising
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| Our firm provides services related to all the above strategies. |
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| Our Services under Corporate Restructuring of an entity |
- Our firm offers critical assistance to companies that are underperforming, in a crisis, or are healthy, but with underperforming divisions.
- Working directly with company management, our firm helps stabilize financial and operational performance by developing and implementing comprehensive profitability and working capital plans.
- Firm's involvement reassures creditors and investors that the company is taking steps to address its problems and maximize its value.
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